Russia and Ukraine continue to attack one another's port infrastructure, blocking shipments from the "breadbasket of Europe" and driving up wheat prices, and adding to a grim cocktail of factors afflicting global food supply.
The two vast nations are estimated to produce around a quarter of the world's grain exports. The warring countries exported nearly 100 million metric tons of grain between them in the year to June, according to customs figures, with shipments largely continuing to flow since Russia's full-scale invasion in 2022 thanks to diplomatic agreements to protect global food supplies.
Recent military strikes on grain export facilities, oil tankers and vessels in the Black Sea region have now made it too challenging for shipping firms to get insurance, meaning many are avoiding its ports. Alternative land routes for Ukrainian grain are also being stymied by low water levels on the Danube river, and by rail maintenance in Eastern Europe.
Agricultural shipments are being disrupted not just by conflict on the Black Sea but also by the blockade of the Strait of Hormuz and by the depletion of waterways such as Germany's Rhine.
Ongoing obstruction of those waterways is helping drive up the price of agricultural products such as fertilizer — and adding to farming woes in the process.
Soaring costs for farmers around the world, from fertilizer and diesel to labor, will further jeopardize food security if many decide they simply cannot make the money they need, analysts warn.
Higher fertilizer prices have become "structural" and are here to stay, CoBank's lead economist Jacqui Fatka wrote in a note last week, with key chemicals in tight supply due to the Middle East conflict.
U.S. farmers are conscious that under-fertilization can prove more costly than higher input prices if they sacrifice crop productivity, Fatka said — a balance that is becoming increasingly precarious as they exhaust other options for optimizing yields.
"Cash is tight at the farm gate, limiting some growers from locking in any product for the next crop year until additional financing or working capital becomes available," she wrote.
In Europe too, there is a fear that farmers in Russia, Ukraine and beyond will not plant much this winter because of profitability concerns and an inability to get financing, trade and agriculture analyst Noel Fryer told CNBC.
"A lot of things will come together to seriously affect crops next year," Fryer said on Thursday.
"We've had crops decimated by weather in Europe and the U.S. A searingly hot summer in Europe has eroded grazing potential, with no hay and grass for cattle. A possible result of that is significant herd liquidation," he said.
"We've got no end in sight to the Black Sea problem. The issue with fertilizer since the start of the Iran conflict is still there and if anything getting worse. U.S. corn yields look concerning after a wet spring and less fertilizer use, and could push prices up."
"And we've got uncertainty from a massive El Niño event about to hit," he said, referring to the weather event expected to increase volatility in the southern hemisphere.
"It's just a huge mix of different issues and we don't know how they're going to end. It's a perfect storm."
