Russia pummels Odesa, targeting grain supplies

Investment Analysis Clubs Macro Economic Trends and Risks
#1

{It appears US grains will find a hungry foreign market this year.}

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Odesa is also a major gateway for grain shipments, and its blockade by Russia already threatens global food supplies. Beyond that, the city is a cultural jewel, dear to Ukrainians and Russians alike, and targeting it carries symbolic significance as well.

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https://apnews.com/article/russia-ukraine-putin-business-nat…

Ukraine and Russia account for a third of global wheat and barley exports, which countries in the Middle East rely on to feed millions of people who subsist on subsidized bread and bargain noodles. They are also top exporters of other grains and the sunflower seed oil that is used for cooking.

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https://apnews.com/article/russia-ukraine-putin-business-nat…

#2

{It appears US grains will find a hungry foreign market this year.}

That’s what I was thinking, when this war started, and suggested suspending the ethanol fuel mandate so more grain would be available for people.

The government pandered to farmers by waving it’s magical wand to increase fuel ethanol demand through the summer, diverting more grain away from people, instead.

Steve

5 Likes
#3

That’s what I was thinking, when this war started, and suggested suspending the ethanol fuel mandate so more grain would be available for people.

IIRC corn for ethanol isn’t the same corn as what humans eat.
(Search for field corn vs food corn)

The largest market for corn grown in the United States is animal feed, as it provides a good source of energy. Nearly half (48.7 percent) of the corn grown in 2013 was used as animal feed. Nearly 30 percent of the crop was used to produce ethanol. Only a small portion of the corn crop was used for high-fructose corn syrup, sweeteners and cereal, at 3.8 percent, 2.1 percent and 1.6 percent, respectively.

https://www.usda.gov/sites/default/files/documents/coexisten…

Mike

1 Like
#4

IIRC corn for ethanol isn’t the same corn as what humans eat.
(Search for field corn vs food corn)

Yes. Two different varieties of corn. So you can’t switch from one to the other after they are planted.

Except that it’s still more complicated. Sweet corn is the corn you eat off the cob or as mostly whole kernels. Field corn is typically thought of as animal feed or the base crop for ethanol. But humans also eat field corn. That is ground into corn meal for things like polenta and grits. It’s also used for your breakfast corn flakes and lots of other things that include corn.

So people eat both. The trick is getting people to WANT to eat more field corn - which is highly processed. And to NOT want more sweet corn at the same time. That might be a tough sell in the US. But it could be a very easy sell to people in other places around the world who don’t have enough food.

–Peter

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#5

Yes. Two different varieties of corn. So you can’t switch from one to the other after they are planted.

I made that suggestion within a few days of the war starting, well before it was warm enough to plant corn, even before it was time to plant spring wheat.

Steve

2 Likes
#6

I made that suggestion within a few days of the war starting, well before it was warm enough to plant corn, even before it was time to plant spring wheat.

What is the supply chain time for getting the seeds?

Mike

#7

You wouldn’t necessarily have to change ANYTHING regarding which crops to plant. Because animal feed is somewhat fungible, you could simply replace soybean/whatever animal feed with corn (diverted from ethanol production), and instead ship those soybeans/whatever overseas for human consumption.

1 Like