Ukraine Invasion Leads to Spike in World Food Prices, Disruption of Conventional and Organic Farming

Ukraine Invasion Leads to Spike in World Food Prices, Disruption of Conventional and Organic Farming

This article originally appeared in Presence Marketing’s May 2022 Industry Newsletter

By Steven Hoffman

Russia’s invasion of Ukraine in February has become a costly war not only in terms of the devastating loss of lives, but, also, as Ukraine – known as the “world’s breadbasket” – is a major producer of conventional and organic crops such as wheat, barley, sunflower oil and more, it also has resulted in major disruptions to agriculture and trade, and now, the highest food prices the world has ever seen.

Photo: Wikimedia Commons

The United Nations Food and Agriculture Organization (FAO) in April warned that food prices could rise by up to 20% as a result of the conflict in Ukraine, raising the risk of increased malnutrition around the world, as well as social unrest. Tracking the world’s most-traded food commodities, FAO reported that food prices are at their highest since record-keeping began 60 years ago, jumping 13% in March, following February’s record rise.

According to the U.N.’s Food Prices Index, the prices for vegetable oils have risen 23%, while cereals were up 17%. Sugar rose 7%, meat was up 5%, while dairy, which has been less affected by the war, climbed 3%. Food commodity prices were already at a 10-year high before the war in Ukraine because of global harvest issues, the U.N reported.

Russia and Ukraine alone account for 30% of the world’s trade in wheat, 32% of barley, 17% of corn, and over 50% of the world’s market for sunflower oil and seeds. In fact, Ukraine’s flag in part represents blue skies over fields of wheat. And, as the war has choked off supplies from Ukraine, the world’s biggest exporter of sunflower oil, that also means the costs of alternatives have climbed.

Ukraine Planting Season Disrupted
As the war drags into Spring, and with Russia’s ongoing campaign targeting agricultural zones to the east, there’s a concern about whether Ukrainian farmers can plant much of anything this year. And if they do get their crops in the ground, production could be limited due to scarcity of seed, fertilizer, fuel and other inputs, much of which comes in from port cities including Mariupol, which are under siege. Ukraine alone exported more than $27 billion in agricultural products to the world in 2021, NPR reported.

According to Jörg-Simon Immerz, head of the grain trading at BayWA, Germany’s largest agricultural trading group, “Zero grain is currently being exported from the ports of Ukraine—nothing is leaving the country at all.” In addition, Deutsche Welle TV reported that since the invasion began, up to 300 ships have been stopped by Russian forces from departing the Black Sea, “leaving one of the key global trade routes for grain virtually blocked.”

The longer the war goes on, the more the impact on food exports will affect the world’s poorest countries. Many nations in Africa and the Middle East are largely dependent upon wheat imports from Russia and Ukraine; Lebanon gets 80% of its wheat from Ukraine, while Egypt gets 80% of its wheat from Ukraine and Russia. Somalia and Benin are 100% reliant upon wheat from these two nations currently at war. Deutsche Welle TV reported that the wheat shortages from Ukraine are being especially felt in eastern Africa where the price of bread and sunflower oil have more than doubled since the war began.

War Drives Food Inflation; Low Income Households Disproportionately Affected
Lower income households throughout the world, including the U.S., are being disproportionately affected by the drastic rise in food prices, triggered by two years of economic and supply chain disruptions resulting from the COVID-19 pandemic and exacerbated today by the Russia-Ukraine conflict.

According to Consumer Price Index data released in April by the U.S. Bureau of Labor Statistics, food-at-home prices rose 10% over the past year – the fastest pace since March 1981. Food and energy costs drove inflation to 8.5% in March compared to the same month a year ago, marking the highest rate in more than 40 years as consumers continue to feel the pinch of higher prices.

Meanwhile, grocers have tried to keep price increases from reaching consumers on such staple items as bread, meat and eggs, however, that strategy is becoming increasingly difficult, reports Food Dive. As a result, many consumers are opting for cheaper products over brand loyalty.

Analysts at Bank of America on April 21 predicted the impact of the Russia-Ukrainian conflict has yet to be fully felt in grocery stores. “Looking ahead, we think that consumers will continue to feel the pinch of elevated food inflation,” the analysts wrote. “While there has been a lot of attention on the shock from the Russia-Ukraine conflict, we believe that it is too early to see the impact at the grocery store…rather, it should lead to sustained price increases later this year.”

The Bank of America analysts reported that they expect U.S. food inflation to reach 9% by the end of 2022.

Fortune Magazine reported that Bank of America’s analysts noted that farmers, too, are dealing with spikes in the cost of inputs including fertilizers and pesticides, which have increased 50% in the past year alone, based on U.S. Bureau of Labor Statistics Producer Price Indexes. Russia was one of the world’s leading exporters of fertilizers in 2020, including urea and potash, according to the Observatory of Economic Complexity, and fertilizer prices have also been fueled by higher costs of natural gas, used in the production of nitrogen-based fertilizers.

“There are signs that companies are passing through higher costs,” the Bank of America team said, according to Fortune. “Margins look to be growing on both the wholesale and retail level, suggesting that companies have regained pricing power and are comfortable letting the consumer eat higher costs instead of them.”

Ukraine’s Organic Farming Regions Are Under Occupation
Ukraine is one of the world’s leading producers of organic crops. According to the European Commission, the country was the largest exporter of organic products to the EU in 2019, and the second leading exporter of organic products in the world, out of 123 countries.

In 2020, there were 462,225 hectares (1.1 million acres) of organic land in Ukraine, reported Organic Info Ukraine. However, much of the land under organic production is in areas where there are currently hostilities or occupation. “Since 24 February 2022 (the beginning of Russia’s full-scale invasion of Ukraine) the organic sector as well as the entire agrarian industry have been suffering from aggression. The biggest problem in many regions is access to land.” The Kherson region, for example, which is Ukraine’s largest organic region, is almost completely occupied by Russian troops, the organization noted.

Exports notwithstanding, humanitarian concerns also revolve around Ukraine’s farmers and the country’s ability to feed itself during the war. “Ukraine is a leading global supplier of agricultural products and exports a large amount of organic produce to different countries in Europe,” the Research Institute of Organic Agriculture (fiBL), based in Switzerland, said in a statement issued in mid-April.

“At the moment, FiBL and its partners (Organics International, Helvetas, and IFOAM Organics International) are looking into how they can adjust their project activities in Ukraine to meet the current needs of the Ukrainian organic sector. This is important to ensure that people of Ukraine have access to healthy nutritious food grown sustainably and that (organic) farmers do not lose their livelihoods. We are currently working with Ukrainian organic stakeholders and partners to ensure they can continue to grow and supply food and feed – now and in the future,” fiBL said.

The international organic food and agriculture community, including fiBL, IFOAM Organics International and others, is calling on its constituents to support the organic farming sector in Ukraine. Organic Info Ukraine published a “Statement on the Situation in the Ukrainian Organic Sector,” along with information on how to support organic producers and organic stakeholders in Ukraine during these critical times. Learn more and take action here.

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Steven Hoffman is Managing Director of Compass Natural, providing brand marketing, PR, social media, and strategic business development services to natural, organic, sustainable and hemp/CBD products businesses. Compass Natural serves in PR and programming for NoCo Hemp Expo and Southern Hemp Expo, and Hoffman serves as Editor of the weekly Let’s Talk Hemp Newsletter, published by We are for Better Alternatives. Contact steve@compassnaturalmarketing.com.

Organic Farming Could Boost Carbon Sequestration by Double Digits, New Study Says

Photo: Pexels

This article originally appeared in Presence Marketing’s April 2021 Industry Newsletter

By Steven Hoffman

In a meta-analysis of more than 4,000 studies, researchers found that organic farmers could increase the amount of carbon captured in the soil by double digits by adopting best organic farming practices. The study was published in the journal Agriculture, Ecosystems and Environment by researchers at the University of Maryland in collaboration with The Organic Center, a nonprofit research and education organization based in Washington, D.C. Examining different practices such as the use of organic soil amendments, conservation tillage and cover crops, the researchers found that best practices in organic soil amendments, such as compost and manure, had the biggest and fastest impact on carbon sequestration, by an average of 24%. “The study is the first of its kind – looking within organic management to not only highlight the areas where organic excels at locking greenhouse gas in the soil, but also identifying the areas that have the biggest beneficial impact, enabling organic growers to maximize their ability to fight climate change,” said Jessica Shade, Ph.D., Director of Science Programs for The Organic Center. The study identified four practices that are most critical to good soil health, including planting cover crops; applying combinations of organic inputs; increasing crop rotation diversity and length; and conservation tillage. The Organic Center highlighted the report’s main findings here.

One Organic Farmer Treats Hemp Grown for CBD Like a “Specialty Vegetable Crop”

Originally Appeared in Let’s Talk Hemp Newsletter, May 2019
By Steven Hoffman

The importance of certified organic in hemp agriculture cannot be overstated. Currently, nearly 80,000 acres are in hemp production in the U.S., and very few of them are certified organic. That means that the majority of hemp produced in the U.S. is being grown conventionally, using potentially toxic, synthetic pesticides and synthetic nitrogen fertilizer derived from the fracking of natural gas.

Frankly, that’s not very good for the environment or for the oncoming climate crisis, as conventional agriculture is one of the largest non-point sources of global greenhouse gas (GHG) emissions contributing to global warming, and fracking releases massive quantities of methane – another potent GHG – into the atmosphere. On the other hand, organically grown hemp can actually sequester carbon out of the atmosphere and put it back in the soil where it belongs, helping to keep CO2 and other noxious GHGs out of the atmosphere.

Additionally, when given a choice, I’ll choose CBD and hemp extract products that are produced and processed organically, thus minimizing my dietary exposure to toxic pesticide residues and other chemical solvents, because who wants pesticide residues included with their concentrated botanical medicine?

Seeing the explosive growth of the hemp market in the wake of the 2018 Farm Bill, the organic industry’s leading trade association, the Organic Trade Association (www.ota.com) invited my communications agency, Compass Natural, to help plan and present an educational track focused on farmers’ perspectives and market opportunities for certified organic hemp, CBD and related products as part of OTA’s annual Organic Week policy conference, held May 20-23, 2019, in Washington, D.C. OTA’s Organic Week draws organic industry leaders from across the U.S. to interact with policymakers and Congressional leaders to help forward the interests of organic food and agriculture.

At the Organic Week conference, OTA announced that sales of organic products in the U.S. surpassed $50 billion, growing 6.3% to reach a record $52.5 billion in 2018. Almost 6% (5.7%) of all food sold in the U.S. is now organic, driven in large part by demand for organic produce, dairy, plant-based products, dietary supplements, textiles and fiber. “Organic is now considered mainstream. But the attitudes surrounding organic are anything but status quo,” said Laura Batcha, CEO and Executive Director of the OTA. “In 2018, there was a notable shift in the mindset of those working in organic toward collaboration and activism to move the needle on the role organic can play in sustainability and tackling environmental initiatives.”

Lobbying for Hemp
As part of OTA’s Organic Week, I was scheduled to visit several congressional offices on Capitol Hill, lobbying on behalf of organic food and farming and industrial hemp, CBD and related products. The staff at the offices of Colorado Senators Michael Bennett and Cory Gardner were supportive of industrial hemp in our meetings, and in alignment with Colorado Governor Jared Polis’ goal of furthering Colorado’s leadership in industrial hemp, as were staff leaders in the offices of Colorado Representatives Joe Neguse and Diana DeGette. However, staff at the offices of Idaho Congressmen Russell Fulcher and Mike Simpson deferred to their state’s legislature when it came to my questions regarding Idaho’s seizure in January of a container shipment of industrial hemp from a licensed grower in Oregon bound for processing in Colorado, despite the 2018 federal Farm Bill declaring that interstate transport and commerce of hemp-derived products is now legal throughout the U.S.

In addition to our Capitol Hill visits, I moderated a lively seminar attended by a number of organic farmers interested in or already growing hemp for food, supplements and fiber as part of an educational track focused on hemp during OTA’s Organic Week. At the seminar, longtime organic farmer Chris Jagger, owner of Blue Fox Farm in Oregon, shared how he began growing hemp three years ago. Instead of planting hemp densely, like they do for fiber production where tall stalks and little foliage are desired, Chris farms his hemp like a specialty crop, or “like vegetables,’ he says, to cultivate the delicate hemp flowers for CBD extraction. Currently, a small number of organic certifiers, including OneCert, CCOF and MOSA are certifying farms for organic hemp production, and rumor has it some other major certifiers will soon follow.

At the same time across town, hemp advocate Ben Droz participated in the inaugural Congressional Cannabis Forum hosted on May 21 by Washington, D.C.-based KCSA Strategic Communications. “While covering all aspects of the cannabis market, the KCSA forum presented a hemp panel that examined capital markets and the global economic implications of the legalization of hemp under the 2018 Farm Bill,” said Droz. “If hemp extracts become a global commodity, it might not necessarily benefit small scale farmers and producers,” he cautioned. “However, until the FDA comes up with more clear guidelines concerning hemp products, the big corporate players will continue to sit on the sidelines, allowing time for smaller brands to establish and build market share, but that could change at any time,” he said. Droz noted that the FDA scheduled its first public hearing on hemp and CBD in food and beverage for Friday, May 31, 2019. Information on the hearing is published in the Federal Register.

Organic agriculture is a bright spot in the U.S. farm economy, continuing to grow at a rate more than double the growth rate of the overall U.S. food market. According to new OTA data, the number of organic farms grew by 39% while the total number of farms in the U.S. shrank by 3% between 2012 and 2017. Organic products can now be found in more than 82% of U.S. homes, and in some states, including California, Arizona, Oregon, Washington and my home state of Colorado, organic products are in over 90% of U.S. households. Here’s hoping that organically produced hemp follows suit.