Before Putin’s forces even breached the Ukraine border, fear and speculation drove commodity prices skyward. Concerns are warranted: Trade disruptions in energy, fertilizer and grains are inevitable. In fact, effects are likely to last for years, possibly even longer.
While U.S. farmers do face higher prices for fuel and fertilizer, they are likely to enjoy an enhanced competitive advantage for some time to come. Here’s why:
- Fuel
- Fertilizer
- Infrastructure
- Capital/credit
- Risk management/crop insurance
Read More: Straight from Ukraine: Farmers Share Planting Updates, Concerns and More
Russia has been invaded 50 times in history. Current demographics suggest that if nothing is done now to plug invasion corridors (gaps between the red natural barriers), if someone chooses to invade later, there will not be the manpower to stop them, according to geopolitical strategist Peter Zeihan.
Similar to many other countries, Russia has more older people (especially women) than younger people, born after the 1990s collapse of the Soviet Union. Seven years ago, they just threw in 8 million children who weren’t in the data the day before. So, odds are there is no young generation coming up, Zeihan says.
If Putin’s first thrust in Ukraine is successful, Zeihan says the Russian leader will next turn his attention to another phase to continue to the corridors on the western side. Next in line would be Moldova, Poland, Estonia, Latvia, Lithuania. In the future, another war would affect NATO countries.
Where the War is at Today
See the map below provided by Zeihan. Red is where the Russians have operational control; blue is where the Ukrainians have managed to hold out. There are three main thrusts of interest to agriculture:
- From the north (Belarus) to Kiev, the political capital. From there, Putin could dice up the country and it would be more manageable.
- From the East – Crimea southeast to Mariupol, where WWII-style civilian obliteration is taking place. Once it falls, the rail line can transport Russians en masse from interior Russia all the way to the west.
- Crimea to Odessa: The major port for the region.
Russia’s Master Plan
This map takes us a step further, Zeihan notes. The heavy dashed lines represent Russia’s “ideal western borders.” Note how that extension would greatly reduce the number of political boundaries the western-facing pipelines (red, gas; green, oil) would need to traverse. It would also give Russia added access to water transportation.
Read more coverage of the Russia-Ukraine conflict.
