Wheat Prices Surge Amid Russia’s Invasion Of Ukraine—Here’s What That Means For U.S. Food Costs

Food & Drink


Wheat prices continued to skyrocket this week—hitting their highest level in 14 years on Thursday—as experts warn the escalating conflict between major exporters Russia and Ukraine could lead to a rise in food prices, which have already been hard-hit by surging inflation.

Key Facts

Chicago futures for wheat prices continued to surge higher on Thursday, jumping another 7% to $11.34 per bushel—trading at their highest level since 2008 as the fighting between Russia and Ukraine could potentially disrupt global food supplies.

Russia and Ukraine account for nearly 30% of global wheat exports combined—and the two countries are particularly important suppliers to the Middle East, north Africa and Asia—but the ongoing conflict has raised fears of global shortages and rising food prices.

Ukraine’s ports have been closed due to the heavy fighting—with many farmers recruited to help defend their homeland, while Russian exports are likely to take a major hit from trade restrictions and heavy sanctions from the West. 

While higher wheat prices might be good news for U.S. farmers (as it could bring back more domestic demand), that’s not necessarily true for consumers, as experts warn that pricing pressures could be felt across the world.

The ongoing conflict could drive up U.S. food prices, which were high to begin with thanks to surging inflation: The recent spike in wheat prices is likely to make the commodity more expensive for food producers, who in turn could pass some of those costs on to consumers.

That could raise the prices of U.S. consumer items like cereal and bread, for instance, though the impact may not be felt right away since consumer prices usually lag commodity prices, which are contracted in advance. 

Key Background:

Wheat prices have surged nearly 40% this month alone amid the escalating conflict between Russia and Ukraine. The last time wheat prices were this high 14 years ago, the subsequent surge in food prices triggered protests and riots in countries across Africa, Asia and Latin America. If you look at what’s happening to wheat prices right now, “we could be talking about a major food inflation story,” Helima Croft, RBC Capital Markets’ head of global commodity strategy, told CNBC in a recent interview.

Crucial Quote:

“[The] last time we ran out of wheat we had the Arab spring. When people don’t get their bread they get very angry,” Cullen Gunn, chief executive of Kilter Investments, told The Financial Times on Thursday.


Federal Reserve Chairman Jerome Powell acknowledged the “highly uncertain” economic impact from Russia’s invasion of Ukraine in testimony before Congress this week, adding the central bank will “need to be nimble” and “proceed carefully.” With commodity prices—everything from wheat to oil—moving up significantly, “that’s going to work its way through our economy,” Powell warned on Wednesday. “We’re going to see upward pressure on inflation, at least for a while.”

Further Reading:

Dow Jumps 600 Points, Oils Hits 11-Year High As ‘Investors Are Whipsawed’ By Rate Hikes And Russia-Ukraine Conflict (Forbes)

Rate Hikes Are Coming In March Despite ‘Uncertain’ Impact From Russia’s Invasion Of Ukraine, Powell Says (Forbes)

Russia’s Invasion Of Ukraine Has Sent Energy Prices Soaring—Here’s How High Oil Could Rise (Forbes)

Wheat, Corn And Soybean Prices Surge Amid Fears That Russian Invasion Of Ukraine Will Lead To Higher Food Prices (Forbes)

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