William W. Wilson, an expert in risk management and trading at North Dakota State University, predicted increased volatility in the U.S. grain market throughout 2023.
Part of the reason commodity prices rose so sharply, Wilson explained, is transportation rates are much higher for alternative grain shipping routes out of Ukraine, according to a report in Feed & Grain. Rail routes that traditionally went to Odessa now route through Romania, Poland and Moldova, which adds as much as $125/metric tonne to costs.
“Unblocking exports by sea will significantly strengthen the stability of the economy and alleviate the acuteness of the food crisis, but only under the condition of stable export of six million tonnes of grain per month at least until March 2023,” Wilson said.
Rising grain prices due to both the war in Ukraine and disappointing harvests in the US, Europe and Asia, are compounding challenges producers already face from global supply chain disruptions and labor and energy costs.
Wilson, who studies grain marketing as well as logistics and supply chain systems, offered his comments during the closing general session of the National Grain and Feed Association’s 2022 Country Elevator Conference in December 2022.
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