Some state cultures may feel pressured by war in Ukraine

By Ching Lee

As Russia’s invasion of Ukraine drives up prices for grain, sunflower oil and other commodities, several California crops may begin to feel the ripple effects of war, pointing out their link to global markets.

Todd Sanders, executive director of the California Apple Commission, said he expects more market competition for California and other U.S. apple growers this year.

Indeed, Poland, which has always shipped a significant part of its harvest to Russia, will seek alternative markets due to the new sanctions against Russia. He said he thinks more Polish apples will show up in markets that currently buy California apples, putting more pressure on those markets.

“Now our apples are going to have to find other homes,” Sanders said. “We’re going to move somebody else or vice versa. It’s just this huge snowball effect.”

Poland remains the leading producer of apples in the European Union and the third largest producer in the world, after China and the United States. Other important players are Turkey and India, according to the Food and Agriculture Organization of the United Nations.

Although Polish apples do not currently have access to the US market because a formal pest risk assessment has never been carried out, Poland has been included in the EU’s request for expanded access to the US market, according to the US Apple Association.

“What I’m hearing is that (Poland) is going to start looking for access to the US market quite aggressively,” said Elizabeth Carranza, director of commercial and technical affairs for the commission of the apple. “That could be something that we could see come into effect here in the next couple of years.”

She said there could also be more market pressure from other EU countries such as France, another major apple producer that may need to seek additional markets.

More immediately, California wild rice producers have already lost a key export market: Russia. Carranza, who also oversees trade for the California Wild Rice Advisory Board, said a recent cargo ship bound for Russia with California wild rice was rejected in port and needed to return.

It is technically still legal to ship wild rice to Russia because the product is not on the US embargo list, she said. But the problem is logistics, as exporters struggle to find shipping carriers willing to get there. Major shipping lines said they had suspended services to and from Russia.

“At this point, we’ve pretty much lost that market for our wild rice,” Carranza said.

Until the start of the war, the advisory board had “actively promoted” California wild rice in Russia with a “fairly comprehensive and robust” program, she said. The advisory board had hired a representative in the country, created a website and promoted the product on social media in Russian. Now, with US sanctions and banks not allowing wire transfers to Russia, paying trade representatives for their services has become a problem, she said.

Most California wild rice is traded domestically. With the loss of Russia, the advisory board shifted its focus and trade promotion funds to other markets, Carranza said.

For now, shippers may need to send more volume to the UK, which remains the main export destination for California wild rice. They were shipping more product to Turkey, Carranza said, but the tariffs made that market less attractive. Canada may be another outlet, and later China, to which the board is working to gain market access.

Even with the loss of Russia, Carranza said she doesn’t think wild rice growers will be deterred from planting the crop because “there are enough opportunities in other parts of the world that they can grab”.

Besides California, Minnesota is the only other state to grow wild rice. In 2020, California produced some 7.2 million pounds of specialty grains, while Minnesota produced 7.92 million pounds.

With about 10,000 acres in the state, wild rice remains a niche crop, especially compared to the more than 550,000 acres of traditional rice that California typically cultivates. Due to water shortages, rice plantings in the state are expected to drop to 348,000 acres this year, the lowest since 1983, according to the US Department of Agriculture.

Shasta County farmer Jim Rickert, who has grown wild rice for 40 years, said water availability and rising input costs, especially for fertilizer, were key factors influencing his planting decisions. . He seeded his crop in the fall, planting his usual 400 acres, although he grew as many as 600 to 700 acres.

With the drought, his current concern, he said, is whether the state will allow him to use his water rights to complete the harvest. “We live in unprecedented times,” Rickert said. “I’m growing this culture on faith. The rules are changing as we speak.”

With the price of medium grain Calrose rice looking more favorable than wild rice – and with a high demand for water to keep the orchards alive – Rickert said he expects little to no wild rice to be grown in the Sacramento Valley this year.

In the past, when wild rice acreage was in the range of 15,000 to 20,000, plantings were distributed among the mountainous regions of Shasta, Modoc, and Lassen counties and the Sacramento Valley, with some acreage in the Lake County. This year, upland producers and those with superior water rights or well water are expected to plant most of the wild rice acreage, he said. With the cost of fertilizer and fuel escalating, “it will not encourage many people to increase production at all,” he added.

For California olive oil producers, the impacts of the Russian-Ukrainian war — which triggered a global shortage of sunflower oil, increasing demand for other cooking oils — have so far been minor. .

While attending Natural Products Expo West in March, Susanna Evans, sales manager for ENZO Olive Oil Co. in Fresno County, said people stopped by her booth to ask about pricing. and whether the company also produced sunflower oil. Because sunflower oil costs “much less” than California olive oil, she said, it’s not considered a viable substitute.

Jonathan Sciabica of Sciabica’s California Olive Oil in Modesto said demand for the company’s oil has remained stable, even though the company has had to raise prices due to soaring costs.

Sean McCauley, who sells 80% to 85% of his olive oil through his retail store in Contra Costa County, said his wholesale business and foodservice sales have remained “pretty static.” But retail sales saw a “double-digit spike”.

He attributed the growth to buyers becoming more savvy about olive oil and willing to support local farmers.

(Ching Lee is deputy editor of Ag Alert. She can be reached at [email protected])

Permission for use is granted, however, credit should be given to the California Farm Bureau Federation when reprinting this article.

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