Global Supply Issues Addressed
The Russian invasion of Ukraine has upended global food supply chains, raised prices for inputs, energy and finished food products, and exacerbated nutrition insecurity in countries around the world, the International Dairy Foods Association (IDFA) says. Earlier this week, IDFA hosted leaders of the European Dairy Association (EDA) in IDFA’s Washington, D.C., offices to discuss these shared global challenges and what the dairy industry can do to help.
IDFA and EDA issued the following joint statement: “The dairy processing associations of the United States and Europe condemn the war in Ukraine as a result of Russia’s brutal invasion. We join the international community in calling for peace and the preservation of human rights for the people of a sovereign, independent Ukraine. Russia’s attack on Ukraine and damage to critical lines of commerce has shocked our global food supply chain and heightened the specter of famine and hunger for the world’s most vulnerable citizens. This crisis requires ongoing humanitarian action and support by our respective governments and civil society organizations. IDFA and EDA are committed to keeping lines of communication open between our two organizations, and we will continue to work together to provide nutritious dairy products to people around the globe who are facing rising prices, food shortages and hunger.”
Washington-based IDFA is led by President and CEO Michael Dykes, and EDA, based in Brussels, Belgium, is led by President Giuseppe Ambrosi.
On Wednesday, U.S. President Joe Biden addressed supply chain disruptions and increasing food prices resulting from the pandemic as well as the war in Ukraine. During a visit to O’Connor Farm in Kankakee, Illinois, Biden announced actions his administration is taking to support American farmers, reduce food prices and feed the world.
“Right now, America is fighting on two fronts. At home, it’s inflation and rising prices. Abroad, it’s helping Ukrainians defend their democracy and feeding those who are left hungry around the world because Russian atrocities exist,” Biden said during his visit.
He noted that the war in Ukraine has cut off a critical source of wheat, corn, barley, oilseeds and cooking oil, as well as disrupted global supply chains for fertilizer, which farmers depend on to maximize yields. These and other actions, combined with the ongoing pandemic-related disruptions to global supply chains, have put pressure on food prices, with global food prices increasing nearly 13% following Russia’s invasion of Ukraine.
Last month, the administration announced it would allow E15 gasoline — using a 15% ethanol blend — to be sold this summer, and this week Biden announced new actions to give farmers more tools and resources to boost production and lower food prices. Specifically, the administration will increase the number of counties eligible for double cropping insurance to help boost production by allowing farmers to plant a second crop on the same land in the same year; cut costs for farmers by increasing technical assistance for technology-driven “precision agriculture” and other nutrient management tools; and provide increased funding for domestic fertilizer production.
“We can make sure that American agriculture exports will make up for the gap in Ukrainian supplies,” Biden said, adding that last year American agriculture exports reached a record $177 billion.
The National Farmers Union (NFU) says it supports these new efforts.
“The Biden administration’s promise to double down on USDA efforts to diversify domestic fertilizer markets is promising, and we look forward to providing input on how to do this most effectively,” NFU President Rob Larew says. “We appreciate the administration’s efforts to create more crop insurance options and flexibility for farmers as we face difficult planting conditions and mounting global instability. We will continue to work with the USDA to identify the best policy options to help farmers across the country meet these challenges.”
Meanwhile, as part of the European Union’s (EU) solidarity response with Ukraine, the European Commission on Thursday also presented a set of actions to help Ukraine export its agricultural produce. Following Russia’s invasion and blockade of Ukrainian ports, Ukrainian grain and other agricultural goods no longer can reach their destinations, threatening global food security, the commission says. Therefore, there is an urgent need to establish alternative logistic routes using all relevant modes of transportation.
The European Commission plans to establish “Solidarity Lanes,” adding additional transport vehicles, prioritizing Ukrainian agricultural export shipments and working to remove bottlenecks. The commission also will work to secure more temporary storage capacity for Ukrainian exports and to establish new infrastructure connections in the framework of the reconstruction of Ukraine.
The commission notes under normal circumstances, 75% of Ukraine’s grain production is exported.
“Twenty million (metric) tons of grains have to leave Ukraine in less than three months using the EU infrastructure. This is a gigantesque challenge, so it is essential to coordinate and optimize the logistic chains, put in place new routes and avoid, as much as possible, the bottlenecks,” says EU Commissioner for Transport Adina Valean. “For both short-term and long-term solutions, we will work with the Ukrainian authorities and in close collaboration, especially with the neighboring member states, who spared no effort in helping during this crisis.”
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