Happy Birthday, America!


Steve Freese
President and CEO

Happy birthday, America! In just a few short days, we will celebrate the 246th anniversary of the signing of the Declaration of Independence on July 4, 1776. This significant milestone commemorates when we forged the birth of a new nation and no longer wanted to be ruled by a colonial empire from across a vast ocean.

When we were in school, we all learned about the important dates and events of the American Revolutionary War. It might be fair to say that most of us have forgotten many of them by now. For example, on July 2, 1776, Congress voted for independence and published the declaration two days later, on July 4. General George Washington read the document to his troops in New York City on July 9. Fighting began with the “shot heard round the world” on April 19, 1775, well before the Declaration of Independence was signed, and did not end until September 3, 1783. The war disrupted the entire American economy. The British Navy’s superiority destroyed most American ships, crippling the flow of trade. The war forced our farmers to suffer tremendously. Fortunately, the colonies received support from France and Spain, which ultimately helped the Americans win.

I share this with you because of some unique parallels we are seeing today with Russia’s war of aggression in Ukraine. Ukraine and its people are fighting for freedom and independence against a tyrannical foreign adversary trying to take over its governmental institutions, much like what we faced against England. Its economy has been dramatically disrupted, and its farmers cannot sell their grain or even plant this year’s crop. Normally I would not talk about this in my monthly column, but the impact of this war reaches far beyond the boundaries of one country.

According to the German Federal Office of Economic Affairs and Export Controls, Ukraine accounts for 11.5% of the world’s wheat market and Russia for 16.8%. Combined, that is 28% of the world’s wheat production. The disruption of war through bombing and/or sanctions has adversely affected the flow of this wheat into standard market supply chains. It will likely affect the cost and availability of flour here at home. Even though most of this wheat goes to Africa, there are other disruptions in the global wheat market, particularly with flooding in large portions of China’s wheat-producing regions. Global supply and demand will see challenges similar to what we have seen with gasoline prices. When raw material is constrained, the price goes up because the people who need to eat it will still need to buy it.

I expect about the time we start preparing to bake our Christmas cookies this winter (maybe sooner), we will see a spike in the price of all products that use wheat. It will have a ripple effect through our economy. Strong inflationary forces will not help the situation either. This is just one more of the supply-chain issues we will see continue throughout the summer and into fall/winter.

Even with many of the challenges we are currently facing, it makes me appreciate ever so much the bounty, the opportunities, and the freedoms we enjoy in this country. I pray that our farmers have a bumper crop. I pray for peace in Ukraine. And finally, I hope everyone in our electric cooperative family truly enjoys our Independence Day and celebrates the liberties and freedoms that our founding fathers envisioned for all of us 246 years ago.