Russia attack on Ukraine could drive up U.S. food prices

Russia's attack on Ukraine is expected to drive up food prices at U.S. grocery stores, adding to the sharpest rise in inflation for Americans since the 1980s.

The war is expected to slow or even halt crop production in Ukraine, which is one of the world's largest producers of wheat as well as some seed oils, according to a Washington Post report. Reduced supplies of wheat and sunflowers could ratchet up prices on a range of foods, including bread, beer, animal feed and some meats. 

"The expectation is that those Ukranian crops won't get planted this year and that the Russian crops will be embargoed, and so a lot of parts of the world will be in need of imports. And so there will be a mad scramble for the excess," Laura Reiley, a reporter at the Washington Post, told CBS News Mornings. 

The U.S. could also increase its exports of wheat to meet international demand, which could drive up domestic prices. 

"We're already starting from a position of very high prices — we all know that from the grocery store," Reiley said.

Ukraine and Russia typically account for 29% of global wheat exports and 75% of sunflower oil exports. If sunflower oil becomes hard to find on store shelves, other vegetable oils will likely become more expensive as well. 

Consumers should expect price hikes "pretty much instantly because of the interconnectedness of some of these markets," Reiley said.

American farmers also could see their costs rise because of war in Ukraine. The cost of fertilizer, which is already elevated, is expected to increase because of the rising cost of natural gas, a key component in the process to make nitrogen-based fertilizer. Russia is one of the world's leading producers of natural gas, and energy costs have surged amid concerns that the conflict will disrupt global supplies.

"Fertilizer for American farmers, which is already starting from a position of very high prices, will continue to go up," Reiley said. "That in turn impacts the cost per acre of planting. Whether that's corn or soy or specialty crops — the vegetables that we eat — and that cost will be passed up the chain to grocery stores and then on to the consumer."

This could indirectly cause the price of beef, pork and chicken — foods that require animal feed to be produced — to climb, too.