Farmers hit by higher grain, fertilizer prices

Jiji Press

13:12 JST, April 19, 2022

TOKYO (Jiji Press) — Japanese farmers are being hit by higher prices of grain, fertilizers and other supplies necessary for agriculture and livestock farming, as Russia’s aggression against Ukraine continues.

In particular, grain prices are soaring due to a decline in exports from both Russia and Ukraine, boosting the prices of compound feed.

But many producers are finding it difficult to pass on the higher costs to buyers. “Despite the soaring prices [of supplies], we can’t reflect them in our prices,” said Toru Nakaya, head of the Central Union of Agricultural Cooperatives, or JA Zenchu.

Retail prices of fresh food items, such as vegetables, are usually determined by their supply-demand balances because it is difficult to adjust the amounts of production quickly.

Higher prices of supplies needed for production therefore directly lead to a decrease in farmers’ net income, Nakaya stressed.

Grain prices had risen due to drought-caused poor harvests. The situation worsened further as Russia’s invasion of Ukraine sparked supply concerns, leading wheat futures on the Chicago Mercantile Exchange to rewrite their record highs for the first time in 14 years. Compound feed prices also rose sharply. The Japanese government increased the amount of its price stabilization fund. But there are concerns that the fund “may run out,” according to a lawmaker of the ruling Liberal Democratic Party.