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How the war in Ukraine could impact grain prices

France Baguette Prices
Posted at 6:11 AM, Mar 30, 2022
and last updated 2022-03-30 09:11:03-04

The U.S. Department of Agriculture said it expects consumers to spend 4% more on groceries, with the war in Ukraine at least partly to blame.

Although both Ukraine and Russia are leading exporters of the world’s wheat and corn, local bakeries don’t think the conflict will impact them — yet.

Great Harvest Bread Company in Tempe said it has a longstanding relationship with the farmers it works with to purchase grain for their wheat milled in-house.

Manager George Walston said their rates for the short-term likely aren’t going to change on them since the grain they need is already in silos and warehouses.

It’s what happens if this war in Ukraine goes on for the long term.

Experts believe low-income countries would likely feel the impact of rising wheat prices the most.

It’s also important to remember while weighing the economic impacts of war, for those directly involved, it’s a matter of life and death.

Still, Walston said the grain market isn’t as volatile and reactive as the oil market.

The supply for grain is already in the chain. For most shops, the chain goes from the farmers to the millers, then to the distributors, then to the bakers, and finally, the grocery stores.

Walston said it’s going to take time for each step to absorb any major financial impacts.

“It has to pass through their hands, and then they'll kind of evaluate what's going to happen,” Walston said. “If we're going to see these prices rising up specifically because of [the war], that's going to take a minute to actually hit the shelves for the customers.”

Walston also said the best way to secure local supply chains is to shop local, whether at a store like his or a farmer’s market.