August 3, 2022

The impact of the war in Ukraine affects the state’s agricultural economy

Inna Kozionova and three other Ukrainian women sit at a picnic table near an old farmhouse.

Emerging fields of cucumbers and cabbages, backlit by the late afternoon sun, surround them. That moment – of being lulled by the buzz of cicadas – is far from their war-torn home. The four women came to Waverly, Minnesota as seasonal workers for Untiedt’s Vegetable Farm, a job that provides a welcome daytime distraction from their worst thoughts.

Kozionova’s husband serves in the Ukrainian army. The 35-year-old crossed the border from her country into Moldova with her 3-year-old son after fleeing his parents’ home in March. She now greets the boy, who is wearing a T-shirt decorated with airplanes, in the doorway.

“When I’m working,” Kozionova said, “I think about work. When I have a day off and just reading the news…”

She leans back in her chair.

“I just cry all day.”

News of the war in Ukraine has largely fallen from the top of American nightly newscasts.

But for those working in agriculture, the conflict has torn a hole in the fabric of an industry that encircles the globe.

Few places in the United States have ties to Ukraine as deep as Minnesota, where a rocket landing in a wheat field in Kherson can mean higher prices for a wheat farmer in Kittson County, or a landmine in a port outside Odessa increases stress for an agribusiness executive in Inver Grove Heights.

“We have no baseline for some of the experiences we’re going through, like having a grain-laden ship sitting in a harbor unable to move since February 24,” said John Griffith, senior vice president of CHS, the farmer-owned cooperative that reported nearly $40 billion in revenue in 2021. “I’ve been in this business for over 30 years, and I’ve never had such a situation.”

Together with Russia, Ukraine provides 40% of African wheat. The resulting shortage of wheat—and the resulting food inflation—has already led to street protests in Iraq.

A deal struck two weeks ago between Russia and Ukraine on a Black Sea export corridor has raised hopes of global famine relief. Even with the deal, it could take weeks or months for ports to become operational with ships carrying grain, said a senior analyst at a Minnesota-based multinational agriculture corporation, who spoke with the Star Tribune on condition of anonymity.

A few hours later, Russia sent missiles over Odessa this weekend, diminished hope for stable grain exports.

Under a giant maple tree off the highway. 12 near Waverly, the four Ukrainian women attempt to make sense of Russian President Vladimir Putin’s reason for war. The Untiedt Vegetable Farm has long depended on Ukrainian workers with H-2A visas.

But this year, the seasonal staff at Untiedt’s is almost entirely female due to The reign of Ukrainian President Volodymyr Zelenskyy banning men between the ages of 18 and 60 from leaving the country.

Mariana Pykivska, 33, a seasonal employee of Untiedt for the past decade, said she believed the Russians had retaliated against Ukraine for wanting to join NATO and the European Union.

“[Putin] wanted to save us,” Kozionova said emphatically. “But from whom?

Since the start of the war, Minnesota farmers and agribusinesses have found themselves in a precarious situation. The head of global trade who spoke to the Star Tribune said that over the past two years analysts have been studying pandemics and virology. Now they have opened military history textbooks.

Cargill, headquartered in Wayzata, saw one of its chartered vessels hit by Russian rockets in the Black Sea in late February.

After the invasion, CHS leaders organized a mission to help some of its more than 40 employees and their family members flee Ukraine. A worker, who is now back in Kyiv and asked to be called Olga for the protection of her family, spent 19 hours in a car in early March after an ambulance rushed her father to a Romanian hospital after suffering from heart failure.

“We had food with us. We also had a can of gas,” said the employee, who was traveling with her husband. “I only slept standing in the queue [to cross into Romania].”

The war also drove up the profits of these agribusinesses. Members of family heirs who own Cargill have become wealthier during the war. CHS reported an increase in earnings over the past quarter.

In an interview this month with the Star Tribune, CEO Jay Debertin said CHS’s balance sheet often reflects global prices. Just as its profits in the energy sector have disappeared during the COVID-19 pandemic, they have also increased with the rise in the price of oil.

“But, at the same time,” Debertin said, “I would quickly trade those benefits for people who weren’t horribly mistreated.”

Debertin also spoke of the heavy logistical pressure on delivering grain from Ukraine to the outside world – including what he called the “trickle” of grain the company is able to transport by rail.

At agricultural sites in Untiedt, Ukrainian workers are immersed in the busy growing season. The company sends products to Kowalski’s and Cub grocery stores in the Twin Cities.

Inna Zhemchuzhkyna, 40, arrived at the farm this spring from Kharkiv, a city in eastern Ukraine under siege by Russian attacks. She wiped away tears as she recounted – speaking via the translation of one of the other women – spending nights in hiding with her family underground in a car park while Russian missiles pounded above her head.

“Eventually we ran out of food,” she said.

On March 6, desperate and hungry, she and her 13-year-old daughter and her husband boarded a packed train bound for Poland.

“They should stop the train because there were gunshots along the way,” Zhemchuzhkyna said. “We were afraid that they would break the road and the train would not be able to move forward.”

Like the others, Zhemchuzhkyna wants to return home by the end of the year. But there is little for her in Kharkiv now.

“You worry a lot about the country,” Pykivska said.

The horrifying headlines of dead children and innocent lives lost sparked calls for a boycott of Russian products, food and energy.

But Walter Kunisch, senior commodities strategist at Hilltop Securities, said he fears the approach will only exacerbate the cost of food for Americans as governments scramble to impose sanctions on Russia and its products — from its natural gas to fertilizers and more. by food.

“Russia caused this global supply shock,” Kunisch said. “But yet the world really needs Russia and depends on Russian exports to solve the problem.

The war led to higher prices for fertilizers and diesel, which drove up costs for farmers. But high commodity prices at grain elevators are expected to boost farm incomes this year, according to a survey of banks by Minneapolis Federal Reserve.

For the farmer, says Lucas Sjostrom, executive director of the Minnesota Milk Producers Association, these price swings can incentivize producers to plant wheat instead of alfalfa, driving up costs for ranchers struggling to find affordable hay to feed their livestock.

“It seems small,” said Sjostrom, who also operates a dairy in western Stearns County. But the whole world has an impact on what happens at the hay auction at Sauk Center.”

At a Monday Congressional hearing near Northfield, KC Graner, a senior vice president at Central Farm Service, listed what he called the daunting challenges facing the nation: a supply crisis, inflation, the war in Ukraine and the resulting food insecurity.

“I feel like I’m losing my breath here,” Graner said.

Back in Waverly, life for Ukrainian women seems almost normal – if you squint. Both children attend summer school. Neighbors stop the women at the grocery store and wish them luck. At night, they hear the sound of passing cars and the occasional hoot of an owl.

When asked how their days differ from home, they answer without hesitation.

“It’s safe and quiet,” Zhemchuzhkyna said.

“Protected,” said Valentina Gurska, 44.

War remains a daily, albeit terrible, reality. But they are looking for bright spots.

“In Ukraine now,” Kozionova said, “almost everyone has someone or knows someone…”

She paused, searching for the right phrase, before Pykivska finished her thought for her.

“Who we can be proud of.”

Farm labor in Minnesota pays better than what they would receive back home. In years past, they bought cars and paid off mortgages with income generated in America.

Women know that what they return to will be different from what they left behind.

“You know, every time I was here [in past years]”, said Kozionova, “I’m counting the days until my flight returns. But not this year.”

She misses her mother and her brother. But it is her husband, Yuri, the father of her son, who she misses the most.

Yuri has been fixing helicopters for the Ukrainian army and sleeping on the job since the early days of the war. Kozionova looks east.

“I’m very scared.”