If we have learned anything in recent years, it’s that military conflict between countries has a massive impact on global grain markets.
The most obvious example is the ongoing war between Russia and Ukraine, two of the world’s biggest grain producers and exporters. When Russia invaded Ukraine four years ago, wheat and corn prices soared on fears that the war would cripple Ukraine’s ability to produce and export those crops. To a certain extent, those fears have been realized, even though Ukraine has managed to create a well-functioning and relatively safe grain export corridor.
In the four years prior to the invasion, Ukraine produced an average of 36 million tonnes of corn and exported an average of 27.5 million, according to the Foreign Agricultural Service of the US Department of Agriculture. In the past four years, those numbers have dropped to 28 million and 23 million tonnes, respectively. Wheat production also has plummeted, dropping from an average of 28.1 million tonnes in the four years prior to the war to 22.7 million now. Exports dropped to 16.4 million tonnes from 18 million. While other factors contributed to this slide, Russia’s bombardment of agricultural land, inland infrastructure and grain export terminals is the biggest reason for decreased output and shipments in “Europe’s breadbasket.”
This war impacted the global grain market from the moment the first shot was fired, causing grain price volatility, leading to a shift in trade flows and driving crop fertilizer prices higher.
Even in countries that aren’t major grain producers or exporters, military conflict can take a toll on grain markets. The still simmering Palestinian-Israeli conflict, currently in a ceasefire after two years of fierce fighting, has impacted global grain markets even though the parties involved produce and export little grain.
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In a show of solidarity with the Palestinians, the Houthis, a Yemen-based Islamicist group, launched attacks against Israel and Israel-linked ships in the Red Sea, severely disrupting global grain trade in a maritime artery that handles about 8% of the world’s grain shipments. Fortunately, the Houthis’ attacks mostly have subsided since the ceasefire was signed in late 2025.
Even the United States’ recent military operation in grain-poor Venezuela, where it captured President Nicolas Maduro and transported him to the United States to face drug trafficking charges, isn’t without potential consequences for the global grain sector.
China, a Venezuelan ally, could retaliate against the United States in various ways, including withdrawing from its recent agreement to restart purchases of US soybeans after a lengthy period where it stopped buying the oilseed from what had been its largest soybean supplier.
Like Israel, Venezuela is not a major grain producer or exporter, but it does have massive amounts of oil, including the world’s largest proven reserves. Disruptions to Venezuelan oil exports (most of which have been going to China) could impact energy markets, potentially increasing fertilizer and diesel costs for farmers.
Although the situation won’t likely have a major impact on the global grain sector, it adds yet another layer of volatility and uncertainty to an increasingly tense geopolitical situation.
