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Ukraine Conflict Tops 2022’s Ag Headlines

Food Production, Food Technology, Food Trade

Ukraine Conflict Tops 2022’s Ag Headlines

The Dirt

The 2022 list of top stories from the world of food and agriculture has a clear number one: the nearly year-long conflict in the Ukraine. Far beyond the sheer tragedy for Ukraine, the resulting disruption to world commodity and energy markets rippled across almost every aspect of agriculture, generating important news and magnifying the importance of global Interdependence. To help wrap up this momentous year, Dirt to Dinner will highlight some of the biggest news from the year – and point to some of the important stories we will be watching in 2023.

It All Starts with Ukraine

Our readers already know the important role played by Ukraine in major commodity markets. We have covered the effect of the disruption to production and export of grains and oilseeds, fertilizers, petroleum, and other products from Ukraine. The devastation of battle is taking its toll.

We’ve shown how the end of Ukraine exports early this year risked hunger for millions of dependent customers across the Middle East and Africa. We outlined the run-up in commodity prices and inflation around the world. We helped explain the damage to the intricate ballet of international ocean shipping and the harmful effects of the disruption to post-Covid efforts to restore the efficiency of the supply-chain system. We’ve looked at the enormous effort being made to restore Ukraine’s ability to resume exports and avoid further damage to global food security.

But the D2D staff is unanimous in its judgment that the Ukraine conflict is the story of the year for food and agriculture. It is a story that reaches far beyond the borders of Ukraine, with implications that ripple across the economics of our food system, our continuing climate and environmental needs, and a whole host of simple day-to-day events important to how our food system performs.  Let’s consider just a few examples.

The Economic Story

  • Higher energy costs mean higher cost of food production and distribution
  • Rising commodity prices raise raw material costs for food manufacturers
  • Economic shocks along the food chain eventually show up as food price inflation

Higher costs and price instability translate into higher and more unpredictable prices for consumers everywhere.

What makes the Ukraine conflict an economic story?

  • Simple laws of supply and demand. Ukraine is a major player in global markets for corn, wheat, rapeseed, sunflower oil and other commodities that are cornerstones of the modern system. The sudden subtraction of millions of tons and billions of dollars worth of commodities from the market saw prices skyrocket – wheat up by more than a third, corn by more than 20 percent.
  • Energy is fundamental to food production. Ukraine conflict also helped drive sharp increases in energy costs around the world – and nowhere no more so than agriculture. Fuel costs for driving equipment, crop drying costs, sharply higher prices for nitrogen-based fertilizers – all these energy-related farm expenses cut deeply into farmers’ bottom lines. Transportation costs to deliver food around the world also increased.
  • High prices beget even higher prices. Even as commodity prices drifted lower as the conflict continued and some exports resumed, the overall trend upward remained. Food manufacturers had to pay more, inevitably showing up in prices at the grocery store for consumers. Food inflation during the year reached levels not seen in 40 years, with predictions of an annual increase of 11 percent led by rises in beef, poultry, eggs, dairy, fruit – virtually every major food category.

, Ukraine Conflict Tops 2022’s Ag Headlines

The Climate

Climate change remains one of our world’s top priorities. Perhaps no other public policy issue has consumed more time, energy and money in recent years, and 2022 saw that focus grow even more intense.

, Ukraine Conflict Tops 2022’s Ag Headlines

This year’s Convention on Climate Change brought together more than 100 heads of state and government for intense discussions on climate priorities, metrics and timetables.

While a lack of some specific commitments disappointed many, the conference nonetheless marked a major reaffirmation of the global community’s commitment to facing up to the challenges of climate change.

The Environmental Story

  • Dealing with climate change remains a top priority around the world, as global temperatures expect to reach the 1.5-degree C warming level within the next 5-10 years.
  • The entire ag sector increasingly came together during 2022 to address climate change with an aggressive agenda of innovative solutions
  • The Ukraine conflict highlighted our continuing dependence on energy (and fossil fuels) – and the potential for an energy crisis to shift attention and energy away from environmental priorities

2022 saw momentum building within the ag community for collective effort to become an active agent for good in environmental matters.  Ukraine highlights a potentially significant challenge to maintaining that momentum.

Similarly, a collaborative international effort to assess progress in corporate efforts in Environmental, Social and Governance (ESG) maintained pressure on the private sector to address climate and other issues deemed important to responsible corporate behavior.

This year’s report examined records from 350 companies and found greatest progress in Europe, followed by Asia. The United States and Australia trailed those leaders but showed noteworthy compliance levels nonetheless. Agriculture is one of the most active and committed sectors in the battle. In 2022, producers, processors, and CPG companies increasingly embraced better farming techniques and new technologies designed not just to protect the water, soil and air but equally to enhance them.

Farm, commodity groups, academic institutions, the private sector, investment groups and other funding sources converged in a shared effort to deal with food waste, greenhouse gases, improved water management, new technologies for every segment of the food chain – and more.

Regenerative agriculture became a newsworthy movement. No till, cover crops, crop rotation, and carbon sequestration is becoming a practice to enhance the soil, protect crops from drought and flooding, and increase yield.

2022’s notable events

  • Supply chain renewal. The pernicious effects of the Covid pandemic lingered through 2022, in many ways. One of the hidden stories of the year may well be the quiet, relentless effort to restore the smooth functioning of our food supply system. Few headlines were devoted to such things as efforts to add more trained labor, incorporate more innovative new transportation and handling technologies, rethink operational systems, rebalance a severely disrupted ocean freight market, and more.
  • Technology investment. It’s an old cliché: Food may nourish the world. But money makes it grow.  During 2022, enormous amounts of money were invested in developing new technologies appropriate to a completely revitalized global food system. Major areas of focus include such areas as crop health, animal health, crop protection and operational management, controlled environments, data science, automation and robotics, just to name a few. Estimates of investment across the spectrum vary and almost defy precise definition.  But with venture capital investment alone last year exceeding $11 billion, estimates of hundreds of billions of dollars flowing into ag technology seem very plausible.
  • Diversification in all its dimensions. Much of the innovation growing throughout 2022 centers on finding new and better uses for agricultural commodities, and the development of new ways of serving emerging societal needs. A recap of the year should not ignore the continuing efforts to advance development of alternative proteins, biofuels, non-chemical plant nutrients, improved seed varieties and other important elements of an evolving global agricultural system
  • It’s the science, stupid. A prominent U.S. politician once gained widespread attention by reminding voters of the key issue in the upcoming election: “It’s the economy, stupid.” 2022 may be the year in which a paraphrase of that sentiment began to gain real traction. Around the world, sometimes small news reports began to track a shift in sentiment among more people and many institutions, away from suspicion and emotion toward acceptance of scientific fact and reality. More and more stories began speaking of the need for intelligent and responsible use of good science as a critical tool in meeting growing food demand. At Dirt to Dinner, we view that trend as one of the most significant positive signs from 2022 for agriculture and consumers everywhere.

Other Noteworthy News

2022 saw far too many newsworthy events to catalogue here. So let’s look for the big news trends they may represent:

  • Quiet efforts to renew and revive our post-Covid supply chain.
  • Massive investment in all kinds of new and innovative ag-related technology right for the 21st century and beyond.
  • Thinking beyond the traditional – in how we use our commodities, the kinds of food we need, and how to produce them.
  • Growing trust in science – based n recognition of its critical role in feeding a bigger, hungrier world.

2022 saw momentum building within the ag community for collective effort to become an active agent for good in environmental matters. Ukraine highlights a potentially significant challenge to maintaining that momentum.

What about 2023?

Hard as it may be to believe, we at Dirt to Dinner don’t have a magic crystal ball that tells us the future. But we work hard to pay attention to what’s going on in the world of food and agriculture. We try to anticipate what is important and newsworthy – topics that might help our readers to know more about our global food system and to make better decisions about the food we all eat.

We have some ideas about what lies ahead in 2023, and we will be keeping our eye on a number of events, trends and noteworthy efforts at innovation and accomplishment across the food chain. We welcome your ideas about what’s to come, and what you would like to see us cover.

To help spur your thinking, let’s wrap up this special year-end review with a very short list of some of the things we’ll be watching in 2023.

  • Resolution of Ukraine conflict. How do we get back to where we were before all this started?
  • Regenerative ag. How is this important new approach to making agriculture a pro-active agent in addressing environmental concerns progressing?
  • Biofuels. What role can agricultural play in reordering our energy system to reduce dependence on fossil fuels?
  • Water management. How do we make smarter use of water?
  • The Farm Bill. Where are we placing our priorities for the future? How does such a proven successful mix of policies need to adapt for the future?
  • Alternative proteins. We need so much more protein for a healthy world. How are we going to produce it?
  • China and its food security challenges. China is front and center in major global agricultural markets. But the country faces enormous food security challenges – rising population, softer economy, climate and land use issues, growing political tensions, and more. What should we watch for?
  • Ag’s stake in labor, immigration and migration issues. Where re we going to find all the people we need to make our huge agricultural system work?
  • Trends in human, animal and plant nutrition. What’s the best way to think about how we provide all the different kinds of nutrients involved in our food system?
  • Trends in food consumption. What are the emerging trends, issues and interests shaping the food decisions made by consumers?
  • Unpredictable but newsworthy events. Holy cow, I never saw that coming. But I better pay attention.

The Bottom Line

2022 has proven to be another momentous year for agriculture.  Conflict in Ukraine clearly showed how global food security can be quickly and comprehensively compromised. But less-publicized events and trends also provide reason for optimism about the future and our ability to work collaboratively -- with science, rationality and cooperation – to make 2023 another critical year in building a food system superior to anything yet seen in human history. Let’s look at 2022 as evidence of what’s possible, not what’s wrong.

D2D-illustration Bottom Line