U.S. grain traders monitor conflict in Ukraine

U.S. agribusinesses with large operations and investments in Ukraine — often called the breadbasket of Europe — are preparing for a worsening situation as Russia escalates the conflict.

With 70% of its land arable, Ukraine is an agricultural power, among the world’s largest producers of sunflower oil, corn, wheat, barley, canola oil and soybeans.

Minnesota-based Cargill has a sizeable footprint in Ukraine, including a major port operation on the Black Sea, multiple grain silos and oil processing plants scattered across a country that’s nearly as big as Texas.

The company’s easternmost office and facility is in Braginovka, just shy of 30 miles from the Donetsk region currently held by Russian-backed separatist leaders.

“Right now, as of (Tuesday) morning, our businesses in the region continue to operate as normal. We do have contingency plans in place as a precautionary measure because there is still a great deal of uncertainty,” said April Nelson, a Cargill spokeswoman. “We are closely watching the situation there, prioritizing the safety of our people first and foremost.”

Inver Grove Heightsbased CHS Inc. also operates in Ukraine, including at a deep-water port near Odessa, like Cargill. Its operations there are smaller than Cargill’s, but it does have export terminals around Ukraine and Russia.

CHS said most of its employees are based in Kyiv and the company is keeping a close eye on the developing situation.

“(Our employees’) safety and the safety of their families is top of mind. CHS has operated within Ukraine for the last 13 years and we are hopeful that a diplomatic solution to the crisis can be achieved,” CHS spokesman Tom Ryan said in an e-mail.

Tuesday afternoon, President Biden announced what he called a “first tranche” of economic sanctions against Russia. The sanctions are aimed at limiting Russia’s ability to seek Western financing and hamstring that nation’s ruling elites.

Cargill has dealt with geopolitical conflict in the region before. In 2014, the company surrendered control of a sunflower crushing plant in Donetsk to a group of armed rebels.

As one of the world’s largest grain traders, Cargill also has 2,500 employees in Russia, including at its Moscow office.