Inflation has hit the United States pretty hard within the last few months, especially in food and energy prices. However, as they so often are, American farmers have become significantly impacted by sky-high prices among other significant factors. Vance and Louise Ehmke, a farming couple from Kansas and owners of Ehmke Seed, spoke about the ways inflation affects wheat farmers.
What to Know:
- Wheat prices have surged 30% since last month
- Drought and inflation have combined causing increased hardship for American farmers
- American wheat farmers left to fill the gap in supply amid global shortages
How Inflation and Drought Have Affected Farmers’ Profit:
According to American farmer Vance Ehmke, wheat prices have “literally doubled” just within the last couple of years. A bushel that initially cost $5 has gone up to $10 and then $12, before settling back at that $10. However, as we know, increased prices don’t necessarily mean a larger profit for American business owners.
In speaking to the current state of the U.S. economy, Vance shared, “We still enjoy a pretty significant profit margin, but these inputs are rapidly compressing that margin.”
Many Americans continue to struggle with surging prices for food, clothes, gas, etc. amid record inflation. But American farmers are fighting two beasts.
“In addition,” Ehmke added, “we’ve got a very serious set of droughts going on out here in the High Plains.” Although a megadrought has plagued much of the Western U.S. for the better part of two decades. That said, “Even if we went to $20 a bushel, there’s a lot of farmers out here who are going to grow nothing—20 times zero is zero, and those guys are up a creek.”
So, as the rest of Americans battle everyday inflation and supply issues in global market wheat, widespread drought leaves U.S. farmers struggling to fill the gap in demand.
Russia/Ukraine War Heightens Inflation’s Impact on Farmers
Americans were already battling pretty significant inflation when Russia invaded Ukraine at the end of February. However, as the weeks-long conflict has turned into months, the war has begun to majorly impact American farmers.
According to Successful Farming, Russia and Ukraine account for about one-third of the world’s wheat production. And with war-torn Ukraine and Russia focusing its efforts on the conflict, it leaves American farmers to fill the gap.
“[Russia and Ukraine] are very influential on supplying global wheat exports,” Ehmke said, “and I think Russia is still exporting wheat but Ukraine is dead in the water.”
That said, American farmers are working against rough odds. A report on current wheat conditions states February wheat ratings sat at relatively subpar levels. 38% of wheat crops were rated poor to very poor, 37% was rated fair, and just 25% of the crop saw a good to excellent score.