Wednesday, March 23, 2022

Sid Salter: Mississippi Poultry Producers Got Early Lessons in Russo Trade Wars

Forget for a moment, if you can, the horrible human cost of the Russian invasion of Ukraine. Set aside the sad visages of the dead and maimed, the displaced and suffering, and the millions of refugees facing catastrophe.

 

Focus on how the war most immediately impacts you at this point – in your purse or wallet or family budget.

 

Consumers are getting lessons in global trade and economic policy, food insecurity, and how much we all rely on farmers worldwide for sustenance – and all that knowledge is being earned on simple trips to the grocery store and the gas pumps.

 

According to the U.S. Poultry and Egg Association, Mississippi’s largest cash crop is poultry and egg production at a whopping $2.42 billion that fuels some 32,000 direct jobs and another 64,000 indirect/induced jobs among suppliers and other ancillary services.

 

Generally, the chickens eat grain. Their farm-to-market journey from commercial poultry houses to the poultry processing plants includes transport on trucks powered by petroleum products.

 

Russia has a globally relevant supply of oil and gas – and a petrochemical infrastructure capable supply a substantial amount of the world’s fertilizer.

 

More than 25 percent of the world’s grain trade is produced in Russia and Ukraine – earning it the nickname “the world’s breadbasket.” With Russia’s invasion of Ukraine, a set of falling dominoes were set in motion that interjected uncertainty into global financial markets, the global food supply, the world’s energy markets, and virtually any activity used in producing food suddenly became more expensive.

 

Where does that reality leave us? What will be the impacts?

 

“The Ukraine war threatens staple crops from Europe’s key grain-growing regions, which means escalating food prices that have already been plaguing consumers around the world could get worse, raising the threat of a full-blown hunger crisis,” wrote Bloomberg trade analysts Elizabeth Elkin, Allison Nicole Smith and Sybilla Gross on March 13. “The United Nations warned that already record global food costs could surge another 22% as war stifles trade and slashes future harvests.”

 

Since the Carter administration, U.S economic sanctions against Russia and grain embargoes have been on the global economic scene. Mississippi poultry producers, who in Russia found a ready market for “dark” meat that American consumers rejected, were among the first to feel the sting of Russian Federation President Vladimir Putin’s policy lash after the 2014 crisis in Ukraine when Russia annexed Crimea and provoked war in the Donbas region.

 

In response to U.S. and European Union economic sanctions in 2014, Russia instituted a ban on importing agricultural products, raw materials and food – including Mississippi poultry meat. Three Russian scholars at Plekhanov Russian University of Economics and the Russian University of Transport Law Institute, both in Moscow, studied the impact of the ban on Russian markets in a 2018 scholarly journal article,

 

The results? In terms of volume, the import of poultry declined 14 %. In comparison, the value fell 6%: “Before the embargo, the leading supplier of poultry meat to the Russian Federation was the USA (51%), Belarus (16%) and Brazil (10%). After the embargo, the United States (30%) remained the leading supplier along with Brazil (21%). A significant market share of poultry meat supplies to the Russian Federation was captured by Belarus (26%).

 

That is the same Belarus that’s now Putin’s toady ally in the invasion of Ukraine.

According to U.S. Census data, in 2013, Russia imported about $1.3 billion in U.S. food and agricultural products or about 11 percent of all U.S. exports. The U.S. Department of Agriculture’s Foreign Agricultural Service reports that Russia has extended the import ban in the succeeding eight years.

 

A two-year pandemic followed by perfect storm interruption of global grain and energy supplies is a wicked recipe for runaway inflation, food insecurity and soaring energy prices – which is difficult unless one thinks about the tragic fate of the Ukrainian people.


Sid Salter is a syndicated columnist. Contact him at sidsalter@sidsalter.com.


14 comments:

Anonymous said...

"The horrible human cost . . .the sad visages of the dead and maimed, the displaced and suffering, and the millions of refugees facing catastrophe." Funny, I don't remember Sid discussing the similar fate of the Afghan or Iraqi people when the U.S. invaded those countries. But they were brown-skinned, so I guess that was different.

Anonymous said...

This Sid Salter dude needs to stop huffing his on farts. What a sad joke!
It’s like he is trying his hardest to win a pulitzer with every article. But he always comes off as a pretentious tool.

Anonymous said...

Another reworked Wikipedia article straight from the MacBook of Sid Salter.

Anonymous said...

More asinine drivel from Sid. I guess all this inflation is Putin’s fault as well. Get a grip. Can someone please shut this guy up. He doesn’t even have a point. It’s all word vomit.

Anonymous said...

I’m guessing you heard former Michigan Wolverines basketball player Chris Webber use the word “asinine” during a ‘93 postgame conference while discussing Dick Vitale’s comments about him and fellow teammates after losing the ‘93 NCAA Championship to Dean Smith-coached North Carolina Tar Heels.

29 years later, upon believing you finally understand the definition of asinine, you use the word in a sentence.
And still don’t use it, correctly.

Sid’s thoughts aren’t “asinine” as you believe them to be. Simply put, they’re hypocritical.

Anonymous said...

@ 9:00

Pretty sure you're a troll but, let's remember one 4th grade fact:

We didn't invade those countries to kill its citizens. We were going after an enemy that was waging war against our citizens.

Now, you can get your juice pack and cookies.

Anonymous said...

as·i·nine
/ˈasəˌnīn/
adjective
extremely stupid or foolish.

Anonymous said...

Ok so I thought it out. The "move" between Ukraine/Russia and Obama Administration SHOULD NOT be messing with any of us ! This is friggin America ! We have the means for everything right here. Ukraine grain ? We have that. Oil ? Plenty. Hunter and Joe's secrets ? Oh wait....that is in Ukraine.

Anonymous said...

@12:11
The problem isn’t that WE need Ukrainian grain. It’s that the world needs it to feed themselves and their livestock. There are billions of people living in regions that are unable to support their populations with domestic agriculture. Brazil, the USA, Canada, and the other big producers won’t be able to move fast enough to fill the gap that Ukraine is leaving. Also, many nations like Brazil rely on Russian fertilizer. So Brazil may not be able to meet their food production needs. What is happening is a food security crisis looking fast, leading to possible Resource Nationalism. I know that Fox News and CNN aren’t telling you anything so you don’t have a clue. But shit is going to get real, very soon. Hope you are planting your survival garden right now!

Anonymous said...

12:45 : You were doing fine then ...INSULT. Why ? I am an isolationist. IDGAF what CNN and Fox propaganda terds think. Or you.

Anonymous said...

So jimmy Carter's dumb arse taught them how to grow their own grain and now Joe Biden's dumb arse is going to teach them how to feed that grain to their own chickens. The end result ? In a few years we'll be importing chickens from them. Tah Daaah

Anonymous said...

@10:37 AM
Thank you. There is truth to Sid’s commentary albeit in a “look who’s talking” manner.

Anonymous said...

@1:54
We don’t have the means for everything right here. For example, we import ingredients to make fertilizer from Canada. If Canada directs it to the highest bidder, that may not be us. China has secured the protein requirements for the Chinese people by purchasing several of the world’s largest meat packers. That includes Smithfield here in the USA. No law stops them from deciding that every hog carcass goes to China instead of our grocery store shelves.

The Biden Administration is already working on their Digital Emergency Ration system. US citizenship not required. No stamp books this time.

Anonymous said...

1:54 That your feelings were hurt is irrelevant and uniquely your problem.

You should have figured out that isolationism wasn't possible in two world wars because of the economic interdependence between countries and the ambitions of wannabe kings and dictators.

But, that you've not noticed there is more in, not less is hard to understand. Isolation is impossible with global economics being far broader and with our choice to become a military power.
There's also the advances in technology from airplanes to missiles to cyberspace. Oceans and friendly countries at our borders isn't enough anymore.

Isolation and neutrality are no longer options in this century and that you've not faced that reality doesn't call your ability to be realistic or to learn into question.

My grandchildren understand this...that you don't is something that no doubt, troubles those with whom you share your "feelings". They won't tell you, I will.


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