(Bloomberg) -- Farmers are still making money despite the higher costs for fuel and fertilizer, as crop prices have risen even more.

That’s the view of Federal Reserve Bank of Kansas City researchers, who see Russia’s invasion of Ukraine have “long-lasting” effects on the commodity markets. “Disruptions associated with the invasion have contributed to increases in commodity prices, which could support commodity-producing regions and businesses,” they said Monday in a report.

Russia and Ukraine are key producers and exporters of energy and agricultural products, such as natural gas, wheat, and fertilizer. Prices of those raw materials have surged since Russia’s invasion of Ukraine and sanctions that followed disrupted production and flows of commodities. 

Even before the war, prices of raw materials soared with demand surging and supplies choked up due to pandemic-triggered supply chain woes. Now, with trade flows snarled and production crimped, inventory cushions for both crops and energy are shrinking, and futures markets indicate prices are likely to remain elevated, according to the analysts. The impact has been passed down to consumers, who are seeing spikes in prices for gasoline, cooking oil, cereal and other staple household goods.

In the near term, higher prices could cause consumers to consider lower-cost alternatives, according to the researchers. For example, consumers may switch from wheat to other grains like rice, or demand could increase for more energy-efficient modes of transportation, such as electric vehicles, they said.

In the years ahead, global trade flows may be affected as businesses and countries may seek to reduce supply risks and exposures to potentially unreliable or adversarial trade partners. The eurozone may diversify natural gas supplies away from Russia, and wheat buyers in the Middle East may find alternative sources of grain, according to the Fed analysts.

©2022 Bloomberg L.P.