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Fertilizer, Supply Chain Turmoil to Grip Grain Industry

Jay Debertin, President & CEO of CHS, Inc. shared insights at NGFA Annual Convention

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Feed & Grain Staff
Feed & Grain Staff

The Russia and Ukrainian War's impact on food security, fertilizer prices and agriculture supply chains will challenge producers and consumers over the next several months, said Jay Debertin, President & CEO of CHS, Inc., at the 126th Annual NGFA Convention.

"A lot of people in the world live on $20 a day," said Debertin, at the opening of his general session address in Charleston, SC. "And when food supply is interrupted and energy costs are what they are, that has an impact that frankly I think is hard to get our heads around because [in the United States] we don't have some of those same hurdles that people across the world are facing."

Ukraine and Russia export approximately 29% of the world’s wheat exports per week and account for 90% of the world's corn exports. For companies like CHS, Inc., the largest farmer-owned agriculture cooperative, global-scale food insecurity is a top-of-mind issue with exports halted out of the Black Sea.

Debertin also said high demand and limited supply for already high-priced fertilizer will come to a head this summer. Russia produces 11% of the world's fertilizer and it will be difficult for producers to secure alternative sources for next year.

"When it comes to supply, the price is exorbitant, but the fact of the matter is for spring this year, fertilizer is likely either on the water or in storage ready to go. With some exception around the edges, it's in pretty good physical condition."

Russia is an important piece of the American supply chain, but it's not likely they will engage in trade on a world scale for some time, resulting in disruption and possibly opportunity in the short-term, Debertin remarked.

"The integrated supply chains that we built will be tested, but we’ll find a way," he said. "That doesn't happen quickly with ocean freight and markets being called upon that typically wouldn't supply certain areas. But I think we have efficient systems across the world that will react, price will do its job in some respects, and the resources will get to where they're needed."

On the home front, Debertin applauded the passage of the Bipartisan Infrastructure Bill in 2021.

"I like to see spending going to waterways. Particularly as a company that ships a lot of products, the waterways are hugely important. I think the country is woefully behind on waterways spending, but I have a simple phrase for all the members of Congress: Thank you," Debertin said.

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