- Author: Ria DeBiase, Giannini Foundation
Wheat and corn prices have spiked after Russian aggression in the Black Sea
The Russian invasion of Ukraine in early 2022 caused wheat and corn prices to spike 30% and 13%, respectively, and threatened a worldwide food crisis. International efforts to mitigate a food security crisis via the Solidarity Lanes and the Black Sea Grain Initiative (BSGI) have successfully allowed grain exports out of Ukraine. However, Russia's recent withdrawal from the BSGI, coupled with increased bombings of Odesa and Danube River ports, caused another price spike for these grains. Further aggression in the region risks halting Russian wheat and Ukrainian corn exports across the Black Sea, the main export channel for both countries.
Russia accounts for about 18% of global wheat exports and 2% of worldwide corn exports, while Ukraine provides 15% of global corn exports and only 9% of wheat. Why have these statistics spooked the grain commodity markets?
“The simple answer is that Russia's aggression in the Black Sea region increases the risk of the world grain market losing the number four corn exporter, Ukraine, and the number one wheat exporter, Russia, if grain vessels on the Black Sea become targets of drone strikes,” said Colin A. Carter, Distinguished Professor of Agricultural and Resource Economics at the University of California, Davis. If all grain shipped through the Black Sea by Russia and Ukraine were halted, it would cut off 27% of global wheat exports and 17% of global corn exports.
Analysis of the corn and wheat markets by Carter and Sandro Steinbach, associate professor in the Department of Agribusiness and Applied Economics and the Director of the Center for Agricultural Policy and Trade Studies at North Dakota State University, shows a notable increase in market uncertainty since the start of the Russia-Ukraine War, as evidenced by measuring "implied volatility." Implied volatility is the expected price volatility of a commodity like corn or wheat in options trading. In March of 2022, shortly after the invasion of Ukraine, the implied volatility of corn jumped from 25% to 60%, while wheat rose from 40% to 160%. There was also a second peak in volatility in July 2023, after Russia pulled out of the BSGI, suggesting further fears that grain exports through the Black Sea could be cut off from world markets.
When Russia withdrew from the BSGI, there was another brief price spike in wheat (up 15%) and corn (up 10%). Wheat markets have been consistently more affected by conflict in Ukraine, specifically in the Black Sea, than corn prices. This difference can be explained by the fact that 95% of Russian grain is exported through the eastern portion of the Black Sea, while around a quarter of Ukrainian grain is shipped by truck and rail and would not be as affected by the conflict in the Black Sea. By volume, there is around 1.7 times more wheat than corn shipped from Black Sea ports. The wheat market is more politically charged than the corn market because wheat is primarily a food grain. Therefore, the greatest risk to global food security moving forward may no longer be getting grain out of Ukraine – due to the continued success of the Solidarity Lanes – but rather the loss of wheat exports to the world market that could result from Russia backing out of the Black Sea Grain Initiative.
To learn more about how Russian aggression in the Black Sea might affect global food security, read the full article by Carter and Steinbach, “Russian Weaponization of Food Rattles Global Markets,” ARE Update 26(6): 1–4. UC Giannini Foundation of Agricultural Economics, online at https://giannini.ucop.edu/filer/file/1694637435/20778/.
ARE Update is a bimonthly magazine published by the Giannini Foundation of Agricultural Economics to educate policymakers and agribusiness professionals about new research or analysis of important topics in agricultural and resource economics. Articles are written by Giannini Foundation members, including University of California faculty and Cooperative Extension specialists in agricultural and resource economics, and university graduate students. Learn more about the Giannini Foundation and its publications at https://giannini.ucop.edu/.
/h3>- Author: Michelle Leinfelder-Miles
Diagnosing problems in the field is never an easy task, but it is one of the most interesting aspects of my job because I usually never encounter the same set of circumstances twice. This summer, I have been called out on a few interesting diagnostics calls, and I wanted to share some observations.
I visited a blackeye bean field that was planted at the end of June. Since June was unusually cool this year, the grower's planting was delayed. Blackeyes shouldn't be planted until the soil temperature reaches at least 65 degrees F, and the cool spring conditions kept the soil cool. About six days after planting, the beans were only sporadically emerged. The plants that had emerged looked healthy, but the overall stand was poor. The grower said that soil moisture was good at the time of planting. I scratched down and found the seed about three inches deep, which is perhaps a little bit deep for blackeyes. Seed had germinated, and the germinated seed looked healthy with no apparent seedling diseases. Seedling diseases include Pythium and Rhizoctonia. Pythium symptoms appear as water-soaked lesions, and the hypocotyl eventually ‘dampens off'. Rhizoctonia symptoms appear as reddish-brown lesions that can girdle the stem. We felt better that it didn't appear to be a disease problem. I reached out to my farm advisor colleague, Rachael Long, to get her take on the situation, and she agreed that this was likely delayed emergence due to cool soil and a deeper planting depth. In the end, we decided to test our patience, wait a few more days, and see what would happen. After another five days, the grower let me know that the plants had emerged, and the stand looked good!
The UCCE network has a breadth of experience to help identify problems and provide potential management solutions. Please don't hesitate to contact me if you'd like help with diagnosing problems in the field.
- Author: Mike Hsu
Study by UCCE advisor in Imperial County also shows 5% increase in yield
A new study suggests that drip irrigation for sweet corn can significantly conserve water, reduce fertilizer use and boost crop yield in the low desert of California – and likely in other areas of the state with similar conditions.
Although Imperial County is California's top sweet corn-producing county, with about 8,000 acres planted on average each year, irrigation methods for this crop have been rarely studied in this region (or anywhere else in the state), according to Ali Montazar, UC Cooperative Extension irrigation and water management advisor for Imperial, Riverside and San Diego counties.
Montazar conducted a study in the Imperial Valley over two crop seasons, 2020-21 and 2021-22, to demonstrate and quantify the potential benefits of switching to drip irrigation from the more common furrow irrigation method. The study, available in a recent issue of UC Agriculture and Natural Resources' Agricultural Briefs, will be published in a future issue of Vegetables West.
“I'm hoping with this project we can encourage growers to adopt it, because it seems very promising,” said Montazar, noting that drip irrigation is a “new practice” for sweet corn in California.
Among the 11 commercial sweet corn fields in the study over the 2021-22 season, the six that were under drip irrigation used, on average, 37% less water than the five under furrow irrigation. In absolute terms, the drip-irrigated fields saw an average water savings of 2.2 acre-feet per acre; for Montazar, who has studied drip for a variety of crops in the Imperial Valley, that was an astonishing result.
“I've worked with drip on processed onions, lettuce, alfalfa, spinach … we've never seen a figure like 2.2 acre-feet per acre, that's huge,” he said, attributing the dramatic drop-off to the high volume of water required to furrow-irrigate the sandy soil in the Imperial Valley.
More efficient irrigation also means less fertilizer is needed – a boon to the environment and Salton Sea water quality, as well as growers' bottom line. With fertilizer prices continuing to rise, sweet corn growers using drip could see a substantial 25% cost savings on fertilizer expenses – about $150 per acre less – compared to furrow irrigation, according to Montazar's study.
And by relieving plants of the stress from over- and under-irrigated conditions, drip irrigation helps keep soil moisture at its “sweet spot” – resulting in a 5% increase in marketable crop yield for sweet corn in the study.
“When we have a better, more efficient irrigation system, we can maintain soil moisture at a desired level, over time and space,” Montazar explained.
Because the benefits of drip appear to be linked to soil conditions (sandy loam, and other light soils), Montazar believes that this irrigation practice could deliver relatively similar water and fertilizer savings and improved crop yield in other regions across California, regardless of climactic differences.
“If you use drip in any part of the state, you have the benefits of drip – more uniform water application, more uniform fertilizer – that's not related to the desert,” he said. “That's part of the system's potential.”
Montazar plans to follow up on his preliminary study with additional research on sweet corn and drip irrigation during the 2022-23 crop season.
/h3>- Author: Michelle Leinfelder-Miles
UC Cooperative Extension will host the annual Delta field meeting on Thursday, September 30th from 10:00-11:30am, on Tyler Island in Sacramento County. The agenda is pasted below and attached. In addition to providing information on the annual field corn variety trial, this year's agenda includes presentations on nitrogen management in corn and wheat. The attached version of the agenda includes a map and directions to the field site. We have applied for CCA and CDFA INMP continuing education credits. The University is attentive to the ongoing Covid-19 pandemic. Please monitor yourself for Covid-19 symptoms before coming to the event, and do not come if you are experiencing symptoms. While this meeting is outdoors, we will be following University safety precautions for in-person events. Please practice social distancing, or wear a mask if within 6 feet of another person. Thanks for your interest in UC Cooperative Extension programming, and we hope to see you in the field!
Agenda:
10:00am Field corn variety evaluation – preliminary results, Michelle Leinfelder-Miles, UCCE, SJC/Delta
10:15am Variety traits for the Delta, Seed company representatives
10:30am In-season nitrogen management in wheat, Michelle Leinfelder-Miles, UCCE, SJC/Delta
10:45am Development of site-specific nitrogen fertilization recommendations for annual crops, Suzette Turner and Daniel Geisseler, UC Davis
11:00am Viewing of field plots
Printable Meeting Agenda
- Author: Michelle Leinfelder-Miles
I am pleased to announce the following meetings and webinars.
1. The Rice Experiment Station (RES) Annual Field Day will takes place next Wednesday, August 25, 2021 from 7:30am to 12:00pm, followed by lunch. The RES is located at 955 Butte City Highway (Hwy. 162), approximately two and one half miles west of Highway 99, north of Biggs, California. The field day is an opportunity to learn about the research being done at the RES, including variety development. It is sponsored by the California Cooperative Rice Research Foundation (CCRRF) and University of California (UC). For more information, please visit the RES website.
2. Farmers' Rice Cooperative and Wetlands Preservation Foundation will host a Delta Rice Field Day next Thursday, August 26, 2021 from 8:30am to 1:45pm. The event will start at Canal Ranch (23011 Blossom Road, Thornton, CA 95686), followed by a bus tour of nearby Delta rice production. I will be present to answer questions about my rice research and extension program, including the Delta variety trial, armyworm monitoring, herbicide trials, and weedy rice outreach. Space is limited, so please see this flyer to reserve space.
3. The UC Dry Bean Field Day will take place on Tuesday, August 31, 2021 from 9:00am to 11:30am. The field day will begin at Honey Bee Haven, Bee Biology Road, on the UC Davis campus. Due to Covid-19 safety precautions, preregistration for this event is required. There is no registration fee. I invite you to view the agenda and register here. CCA continuing education credits (2.0) are available (0.5 of NM; 0.5 of PM; 1.0 of CM).
4. The UC Alfalfa and Forage Field Day will take place on Thursday, September 23, 2021 from 8:00am to 12:15pm, followed by lunch. The field day will take place at the Kearney Research and Extension Center, 9240 S. Riverbend Ave., Parlier, CA 93648. Due to Covid-19 safety precautions, preregistration for this event is required. There is no registration fee. I invite you to view the agenda and register here. We have applied for DPR, CCA, and N management (ILRP program) continuing education credits.
5. The Vertebrate Pest Council is hosting vertebrate pest webinars on September 28 (field rodents), September 29 (use of rodenticides), and September 30 (managing commensal rodents). The webinars run from 8:00am to 10:00am each day, and registration is required. Please see this flyer for more information.
Finally, the Covid-19 pandemic is a fluid situation. At this time, I plan to hold an in-person field meeting at the Delta field corn variety trial, as I have done in the past. The date is TBD but will take place in late-September or early-October. I will send a separate blog announcement when the date has been set.
Thank you for your interest in our programs. Stay healthy, and hope to see you soon at one of these events.