GREENSBURG — A local farmer is concerned about how local soybean producers will be affected by Russia’s embargo on some U.S. agricultural products. Farm industry analysts said, however, that any impact on U.S. farmers likely will be small.
Russia recently placed an embargo on some U.S. products in retaliation for sanctions from the U.S. and Europe, which have accused Russia “of supplying arms and expertise to a pro-Moscow insurgency in eastern Ukraine,” the Associated Press reported.
Veronica Nigh, an economist with the American Farm Bureau Federation, told the Daily News that the list of products that Russia has banned for import include poultry, nuts, fruit and pork products — though soybeans also have been discussed.
“We’re still sort of finding out what the final list will be,” Nigh said.
Decatur County farmer Albert Armand, who runs Harper Valley Family Farms in Westport, said the embargo poses some challenges, but the impact, as of yet, remains uncertain.
Armand has planted about 250 acres of soybeans.
“Beans are looking pretty good,” he said.
Purdue Extension reported that Indiana’s soybean crop could reach 280 million bushels, the third-highest ever, but Armand cautioned that a lot can happen in the next 60 days to significantly affect yields.
Nigh said that last year, the U.S. exported to Russia $1.3 billion worth of agricultural products, including $303 million of poultry, $170 million of tree nuts — almonds, walnuts, pistachios — $156 million of soybeans, $34 million of fresh fruit and $18 million of pork products.
Overall, Russia is America’s 20th-largest export market, and agricultural exports to Russia account for less than 1 percent of the total, Nigh said.
American Soybean Association President Ray Gaesser said in a news release that Russia is a key market for American soybeans.
“While we certainly want to see a key market protected, it is equally important for American farmers to demand a higher standard from our trading partners,” Gaesser said. “In this case, that standard is not being met, and we urge (Russian) President (Vladimir) Putin to rescind this ban.”
Kyle Cline, national policy adviser for the Indiana Farm Bureau, said Russia’s embargo “will have a negligible impact on the Indiana farmer.”
Other markets continue to grow, and demand for soybeans in China, India and other emerging markets is increasing, Cline said.
“We will be able to find markets for those products,” Cline said.
Nigh also said that Russia’s importance for agricultural exports has been declining in the last few years. In 2012, for example, Indiana exported about $9.5 million of pork products to Russia. By 2013, that figure had fallen to zero, as Russia implemented some more stringent health and safety regulations.
Nigh said that American farmers’ diversification, both in products and end markets, has diminished their dependence on any one crop or market, and that Russia’s embargo likely will have only a small effect.
However, Nigh said that once the embargo is lifted, American producers may see more of an impact, because Russia will have cultivated relationships with other suppliers and entered long-term supply agreements.
“It becomes more difficult to reenter that market,” Nigh said.
She also said that USDA and the American Farm Bureau believe Putin’s embargo is retaliatory, political and in violation of international trade rules.
In the end, she said, the embargo will hurt the Russian people, who import 40 percent of their food, much more than American suppliers.
Meanwhile, Armand, the Decatur County farmer, said many farmers sell a portion of their expected crop early in the season, and hold on to another portion in the hopes that prices rise. The Russian embargo simply adds to the complexity that farmers are facing in today’s market.
“We’re watching it and we have some concerns,” Armand said. “We’re not panicking yet.”