Impact of Ukraine war ripples across Minnesota's agriculture sector

Inna Kozionova and three other Ukrainian women sit at a picnic table near an old farmhouse.

Fields of emerging cucumbers and cabbage, backlit by the late-day sun, surround them. This moment — of being lulled by the buzz of cicadas — is a far cry from their war-torn home. The four women came to Waverly, Minn., as seasonal workers for Untiedt's Vegetable Farm, a job that offers a welcome distraction during the day from their worst thoughts.

Kozionova's husband serves in the Ukrainian military. The 35-year-old woman crossed her country's border into Moldova with her 3-year-old son after fleeing her parents' home in March. She now waves to the boy, who wears a T-shirt adorned with airplanes, in the doorway.

"When working," Kozionova said, "I think about work. When I have a day off and I just read the news …"

She leans back in her chair.

"I just cry all day."

News of the war in Ukraine has largely fallen off the top of U.S. nightly newscasts.

But for those in agriculture, the conflict has ripped a hole in the fabric of an industry that encircles the globe.

In the U.S., few places have ties to Ukraine as deep as Minnesota, where a rocket landing in a wheat field in Kherson can mean higher prices for a wheat farmer in Kittson County, or a land mine in a port outside Odesa raises the stress for an agribusiness executive in Inver Grove Heights.

"We don't have any base reference for some of the experiences we're having, like having a loaded vessel of grain sitting in port unable to move since the 24th of February," said John Griffith, senior vice president for CHS, the farmer-owned cooperative that reported nearly $40 billion in revenue in 2021. "I've been in this business for more than 30 years, and I've never had a situation like that."

Together with Russia, Ukraine supplies 40% of Africa's wheat. The subsequent lack of wheat — and subsequent food-flation — has already led to street protests in Iraq.

An agreement two weeks ago between Russia and Ukraine on an export corridor in the Black Sea raised hopes for relief from global famine. Even with the agreement, it could take weeks or months for ports to become operational with ships moving grain, said a top analyst with a Minnesota-based agricultural multinational, who spoke with the Star Tribune on the condition of anonymity.

Hours later, Russia sent missiles into Odesa over the weekend, diminishing hope for stable grain exports.

Under a giant maple tree off Hwy. 12 near Waverly, the four Ukrainian women try to make sense of Russian President Vladimir Putin's reason for the war. Untiedt's Vegetable Farm has long relied on Ukrainian workers holding H-2A visas.

But this year, the seasonal staff at Untiedt's is almost entirely women because of Ukrainian President Volodymyr Zelenskyy's rule barring men ages 18 to 60 from leaving the country.

Mariana Pykivska, 33, an Untiedt's seasonal employee for the past decade, said she believes the Russians retaliated against Ukraine for wanting to join NATO and the European Union.

"[Putin] wanted to save us," Kozionova said flatly. "But from who?"

Since the war began, Minnesota farmers and agribusiness firms have found themselves in a precarious position. The global trading official who spoke with the Star Tribune said that over the past two years, analysts studied pandemics and virology. Now they've opened military history textbooks.

Cargill, with headquarters in Wayzata, saw one of its chartered ships hit by Russian rockets in the Black Sea in late February.

After the invasion, CHS executives organized a mission to help some of its more than 40 employees and their family members escape Ukraine. One employee, who is now back in Kyiv and asked to be called Olga for protection of her family, spent 19 hours in a car in early March after an ambulance carried her father to a Romanian hospital after he suffered heart failure.

"We had some food with us. We also had a can of gasoline," said the employee, who traveled with her husband. "I was only sleeping while standing in the queue [to cross into Romania]."

The war has also spiked profits for these food and agriculture companies. Members of the family heirs who own Cargill have become richer during the war. CHS reported a surge in profits in the past quarter.

In an interview this month with the Star Tribune, CEO Jay Debertin said CHS's balance sheet often reflects global prices. Just as its energy sector profits disappeared during the COVID-19 pandemic, they similarly have grown with the rising price of oil.

"But, at the same time," Debertin said, "I'd quickly trade those profits for people not being horribly abused."

Debertin also spoke of the severe logistical strain on delivering grain from Ukraine to the outside world — including what he called the "trickle" of grain the company is able to move by train.

At the Untiedt farm sites, the Ukrainian workers are deep into the busy growing season. The company sends produce to Kowalski's and Cub grocery stores in the Twin Cities.

Inna Zhemchuzhkyna, 40, arrived at the farm this spring from Kharkiv, a city in eastern Ukraine under siege by Russian attacks. She wiped away tears as she recounted — speaking via translation by one of the other women — spending nights hiding with her family underground in a parking garage while Russian missiles pounded overhead.

"Eventually we ran out of food," she said.

On March 6, desperate and hungry, she and her 13-year-old daughter and husband boarded a crowded train to Poland.

"They would have to stop the train because there was shootings along the way," Zhemchuzhkyna said. "We were afraid they would break the road, and the train wouldn't be able to move anymore."

Like the others, Zhemchuzhkyna wants to return home by the end of the year. But there is little for her in Kharkiv now.

"You worry a lot for the country," Pykivska said.

The horrifying headlines of dead children and innocent lives lost have energized calls for boycotts of Russian goods, food and energy.

But Walter Kunisch, a senior commodities strategist with Hilltop Securities, said there is concern this approach may only exacerbate the cost of food for Americans as governments grapple with enforcing sanctions on Russia and its products — from its natural gas to fertilizer to food.

"Russia caused this global supply shock," Kunisch said. "But yet the world really needs Russia, and has depended on Russian exports to solve the problem."

The war has led to higher prices for fertilizer and diesel, driving up costs for farmers. But strong commodity prices at grain elevators are expected to boost farm incomes this year, according to a survey of banks by the Minneapolis Federal Reserve.

For the farmer, said Lucas Sjostrom, executive director of the Minnesota Milk Producers Association, these price fluctuations can encourage growers to plant wheat instead of alfalfa, which drives up costs for the livestock producers struggling to find affordable hay to feed their cattle.

"It feels small," said Sjostrom, who also operates a dairy in western Stearns County. "But the whole world's impacting what happens at the hay auction in Sauk Centre."

During a congressional hearing Monday near Northfield, KC Graner, a senior vice president at Central Farm Service, listed what he called the considerable challenges facing the nation: a supply crisis, inflation, the war in Ukraine and subsequent food insecurity.

"I feel like I'm losing my breath here," Graner said.

Back in Waverly, life for the Ukrainian women looks almost normal — if one squints. The two children attend summer school. Neighbors stop the women at the grocery store and wish them well. At night, they hear the sounds of passing cars and an occasional hoot from an owl.

When asked how their days differ from back home, they answer without hesitation.

"It's safe and calm," Zhemchuzhkyna said.

"Protected," said Valentina Gurska, 44.

The war remains a daily, if dreadful, reality. But they look for bright spots.

"In Ukraine now," Kozionova said, "almost everybody has somebody or knows somebody ..."

She paused, searching for the right phrase, before Pykivska finished the thought for her.

"Who we can be proud of."

The farm work in Minnesota pays better than what they'd receive back home. In years past, they've bought cars and paid off mortgages with the income made in America.

The women know that what they go back to will look different than what they left.

"You know, every time when I was here [in past years]," Kozionova said, "I count days till my flight goes back. But not this year."

She misses her mother and brother. But it's her husband, Yuri, the father of her son, whom she misses most.

Yuri repairs helicopters for the Ukrainian army and has been sleeping at work since the war's first days. Kozionova stares to the east.

"I am very afraid."