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Will coronavirus create an opportunity for U.S. wheat, sunflowers?

Both Russia and the Ukraine have said they will curb grain exports, which could lead to more U.S. sales.

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Spring wheat in midsummer. (Jenny Schlecht / Agweek)
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Russia and the Ukraine compete powerfully with U.S. farmers for global wheat and sunflower exports. But now the coronavirus pandemic has caused those two countries to curb their grain exports — and that's potentially good for U.S. producers.

"It could be an opportunity," said John Sandbakken, executive director of the National Sunflower Association in Mandan, N.D. "(Foreign) buyers are nervous."

Other countries that buy wheat are nervous, too.

"We have been actively communicating with our customers about this issue because we have received several requests for reassurance from some of our major trading partners. We have responded that the United States is in a very strong position to remain their most reliable source for wheat — even during this very difficult time," said Steve Mercer, a spokesman for U.S. Wheat, which promotes U.S. wheat exports.

Although details are sketchy, both Russia and Ukraine have said they'll limit wheat exports to protect their domestic food industry, while Russia also has announced a reduction in sunflower seed sales. Sandbakken isn't aware of any plans by Ukraine to limit its sunflower exports, at least not yet.

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It's unclear if the limits actually will reduce exports, according to information from U.S. Wheat. The restrictions set ceilings on how much grain can be exported — levels that might not be reached anyway.

Further, Russian and Ukrainian grain exports typically appeal most to low-priced markets, while U.S. wheat and sunflower exports usually go to foreign buyers that will pay a little extra. So U.S. exports aren't always competing directly with what comes from Russia and Ukraine, Sandbakken noted.

Even so, the possibility of reduced exports from Russia and Ukraine bear watching.

"The export bans imposed by other countries could develop into some opportunities (for U.S. exports) if supplies in importing countries get tight," Sandbakken said.

Russia usually leads the world in wheat exports, with Ukraine and the United States ranking in the top five or six. Russia and Ukraine dominate world sunflower exports — Sandbakken noted that modern sunflowers were developed in that part of the world — while the United States generally ranks in the top 10.

Both wheat, especially spring wheat, and sunflowers are major crops in the Upper Midwest. South Dakota usually leads the nation in sunflower production, with North Dakota ranking second. Wheat is common in northwest Minnesota, Montana, North Dakota and South Dakota.

Stressing security

U.S. wheat officials are stressing that the supply of American wheat exports is secure.

Vince Peterson, U.S. Wheat president, compared the current situation to 1980, when then President Jimmy Carter scrapped existing U.S grain sales to Russia.

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"Today, very concerned import-dependent countries are rightly asking, 'Are there adequate supplies of wheat in the U.S. to cover all of our needs? Is there hoarding or a price shock? And, will our vessels be loaded?' We are quite humbled and yet proud to be able to tell them, yes, there is plenty of grain available," Peterson wrote in a U.S. Wheat newsletter.

He also noted that there is no hoarding, that prices remain relatively low and that the U.S. Department of Agriculture remains committed to inspecting and certifying grain exports.

The U.S. sunflower market has gotten a boost already, Sandbakken said. People are eating at home more often, which has strengthened sales of sun oil.

Related Topics: AGRICULTUREWHEATCROPS
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