On February 24, 2022, Russia invaded Ukraine. On the eve of last year’s invasion, we wrote that the two nations accounted for a disproportionate share of global trade, which underpinned the countless concerns about the availability of food, fertilizer, and other agricultural goods. Grain markets jumped sharply higher, with farm-level winter wheat prices reaching $10.50 per bushel in May 2022, an all-time high.
The conflict has brought several agricultural implications, including Ukraine export challenges and economic sanctions against Russia. In reviewing production, ending stocks, and export data, two charts are especially important to keep in mind.
Ukrainian Acreage
At a high level, the Ukraine corn and wheat situation can be summarized as a decline in production, a decrease in exports, and higher-than-usual levels of ending stocks. There are several potential implications, but those trends don’t generally correspond with favorable farm-level conditions.
Focusing on production, Figure 1 shows harvested acreage of corn and wheat in Ukraine. For the 2022/23 marketing year, Ukraine harvested 13.2m acres of wheat, which is considerably less than the 2022 high of 18.3m. Since 2010, wheat acres in Ukraine have dipped below 16m on just a few occasions, with a notable low of 13.9m in 2012.
Similarly, corn acreage in Ukraine declined from 13.6m in 2021 – the highest observation since 2010 – to just 9.9m in 2022. Corn acres were considerably lower in 2010 (6.5m) and in 2011 (8.8m), but 2022 is the first time acreage has fallen below 10m since the expansion trend from early 2010.
For these two crops, harvested acreage in 2022 was 38% lower for wheat and 37% lower for corn, compared to 2021. Combined, 8.8m fewer acres were harvested of these crops alone.
Figure 1. Harvested Acres of Corn and Wheat, Ukraine. 2010/11-2022/23. Data Source: USDA FAS.
Russian Acreage
Figure 2 shows Russian acreage. Here, the scales are considerably different. First, Russia harvests about 12 times more acres of wheat than corn. Second, Russia’s 70m acres of wheat are much larger than Ukraine’s pre-war high of 18m.
In 2022, Russian corn acreage declined slightly, -1m, but remained largely in line with historic observations. For wheat, however, acreage increased by 3.6m acres. While not shown in these data, the USDA projects 2022 Russian wheat exports to be 32% higher than the year prior.
Figure 2. Harvested Acres of Corn and Wheat, Russia. 2010/11-2022/23. Data Source: USDA FAS.
Wrapping It Up
In Ukraine, the effect across these two crops was an 8.8m acre decrease. When considering Russia’s wheat expansion, the net impact is cut to a 6.1m acres decline. The backdrop for this is this region increased acreage across the 13 primary crops by 35m over the last decade (average of 2010-2012 versus the average of 2020-2022).
Make no mistake, the USDA’s job of estimating agricultural production and trade in this region is more difficult than ever. As a result, a cautionary “grain of salt” should be taken, especially when the year-over-year changes are relatively small. That said, these data, especially in Ukraine, show a notable acreage decline. The implications of fewer acres in production are in addition to export challenges and could linger into 2023 and beyond.