Thursday, 15 October 2020

Russia’s Minister of Agriculture updates Vladimir Putin

Yesterday, Russia’s Minister of Agriculture, Dmitry Patrushev, presented an update to Vladimir Putin, here’s a summary of what he had to say.

The grain harvest is 93% complete and he expects the 2020 grain harvest to exceed 125MMT net weight, including 82MMT of wheat, 7.5MMT more than in 2019.

Other crops include 21.MMT of oilseeds including a record rapeseed harvest of at least 2.5MMT.

Potatoes should be about 22MMT, and vegetables will exceed 14MMT.

Planting of winter crops total area will be over 19MHA, which is half a million hectares more than last year. 

Planting of winter crops has already been completed in 38 regions and is still ongoing in 24 regions.

Farmers have seeds and 3.7MMT of mineral fertilizers, almost 10% percent more than last year.

On trade, the minister reported that the 2020 export benchmark was set at $25bn, and currently exceeded $20bn, while at the same time, work on import substitution continues.

In 2020, despite the pandemic, new markets are open for 18 Russian-made commodity items, and they have the ability to deliver to 160 countries.

They are creating a network of representatives of the Ministry of Agriculture in 50 countries, and, following the lifting of coronavirus restrictions, the first attachés will take up their duties in Thailand, Tunisia, Indonesia, Jordan, Mexico, and Malaysia. 

The minister expects this will contribute to the development of agricultural export potential, and, according to forecasts, the established foreign trade indicators will be met in full this year.

Export restrictions were not mentioned.

Tuesday, 13 October 2020

UK and Ukraine sign a political, free trade and strategic partnership agreement

The UK and Ukraine signed a “Political, Free Trade and Strategic Partnership Agreement”, which, according to the UK government, will “ensure cooperation in political, security and foreign matters”, and "secure preferential trade for businesses and consumers”.

PM Boris Johnson said the “UK is Ukraine’s most fervent supporter” and is “utterly committed to upholding the sovereignty and territorial integrity of Ukraine.”

I’ll leave others to make the obvious observations regarding Crimea and Donbass.

Focusing on the free trade bit of the agreement, in 2019 trade between the UK and Ukraine was worth £1.5 billion.  Top UK exports to Ukraine included aircraft (£79m), medicinal and pharmaceuticals (£61m), and cars (£52m).  During the same period, the UK imported £177 million of cereals and £182 million of iron and steel.

International Trade Secretary, Liz “that-is-a-disgrace” Truss, said, without any hint of irony, that free trade is an incredibly powerful agent of economic growth, opportunity, and human progress. 

Maybe for Ukraine it is but the UK has given up access to a neighbouring market of 445 million people for a trade deal with the poorest country in Europe (alongside Moldova), one that has the world's worst-performing currency, with average salaries of €300 per month, ranks 88 on the Human Development Index, and 120 out of 180 countries for corruption.

Truss goes on to say that, thanks to this deal, the aircraft, automotive and pharmaceutical industries can continue to thrive and support jobs, at a time when airlines are going bust, no one can afford to buy a car anymore, and global warming is just starting to be taken seriously.

In the meantime, Ukraine still uses neonicotinoid insecticides on oilseeds and sugar beet which are banned in the UK, and widely grow GM soya despite it being illegal in Ukraine in what must be the world’s worst kept agricultural secret, all of which end up in products destined for the UK.

Indeed, Liz, free trade is an incredibly powerful agent of economic growth and opportunity, just not always in your favour.

Friday, 9 October 2020

Traveling soon? My advice, don't!

I'm just back from a business trip and my advice is don’t travel at the moment, it's chaos.

Airports are so desperate for business that, apart from shouting at you a bit more and making constant announcements to wear a face mask and to social distance, you are still herded together like the livestock they think you are.

Airlines are so desperate for business that, apart from constant announcements to wear a face mask and to social distance (on a plane?), your face is still 20cm from the back of the head in front of you, and by the end of the flight in the mad scramble to get off, half passengers have their masks pulled down around their chin.

Passport control doesn’t know what the rules are and they are changing all the time anyway, but that doesn’t stop them scrutinising the scrap of paper you’ve been asked to fill in during turbulence as you come into land, then refusing entry, then allowing entry.

Airport restaurants are so desperate for business that you spend the first ten minutes downloading and inputting all your data into an app, which then doesn’t register your order but you don’t know it’s not been registered until, after fifteen minutes, you ask if your food is on its way.  It's not.

Hotels are so desperate for business that often they have closed their restaurants but don’t tell you that when you book, then charge you €30 for a flaccid pre-packed sandwich and warm beer but then you have to come back down to reception to borrow a bottle opener and ask for a glass.

Then, when you do get home you’re in quarantine for 14 days.

Wednesday, 23 September 2020

Russian harvest update

Wheat - 83.8MMT from 27.2MHA (92.3%) at a yield of 3.09MT/HA.

Barley - 21.3MMT from 7.8MHA (91.7%) at a yield of 2.72MT/HA.

Corn - 1.9MMT from 0.5MHA (16%) at a yield of 4.11MT/HA.

Sunflower - 3.2MMT from 1.9MHA (22%) at a yield of 1.70MT/HA.

Soybean - 1.6MMT from 0.8MHA (30%) at a yield of 1.89MT/HA.

Ukraine harvest update

Wheat - harvest finished, 26.96MMT from 6.5MHA at a yield of 4.11MT/HA, clean weight will be around 26.2MMT to 26.4MMT and is down nearly 10% on last year.  

Barley - harvest finished at 8.7MMT from 2.3MHA at a yield of 3.69MT/HA, down 8% on last year.

Corn - started 10 September, 0.3% cut to date producing 74.6KMT at a yield of 3.93MT/HA.

Sunflower - started end of August, 19% cut producing 1.9MMT at a yield of 1.64MT/HA.

Soybean - started 3 September, 9.2% cut producing 217KMT at a yield of 1.76MT/HA.

Tuesday, 22 September 2020

Latest Black Sea crop report out now

The latest Black Sea crop report has just been sent out to our subscribers.

The report covers Russian and Ukraine harvest progress and includes our updated crop forecasts.

The next report will cover the new season winter crop condition, how it's coping with the dry weather and the pace of planting. 

Email me for details of how to subscribe for season-long, independent insights from the field.

blackseacroptour@gmail.com

Dry weather in the Black Sea hurts crops

Just back after a week in Moldova checking in on a farm.

The last trip I went on, pre-lockdown, was also to Moldova, 184 days ago!

It was good to finally be back in the fields looking at crops, although I say good, shocking might be a better description.

Rainfall has been conspicuous by its absence, even the trees are suffering.

Wheat yield was down around 50%; sunflowers down 70%; half the corn crop has failed, plants grew but cobs didn’t form, (presumably linked to high heat at pollination, exacerbated by drought); yet the guys on the farm are saying we haven’t done too badly compared to other regions!

Farmers have been protesting to the government looking for support or some leeway on contracts, not sure they will get it though.

Across the western border in Romania and it’s a similar story; yields are down; recently planted winter oilseed rape is sitting in the desiccated soils doing nothing; one region had declared a state of emergency saying all crops there had died.

Across the eastern border to Ukraine and early harvest yields for spring crops doesn’t look good, particularly in the south and west of the country around Cherkasy, Odesa, and Kirovograd.  

Further east still and reports from Russia’s key wheat growing and export region are of very dry conditions with recently planted wheat crops struggling to germinate and establish.

A pal from there described it as a disaster in the making with no rain for months and everything burning up.

I’m hoping we can run our October tour when we can make a more measured post-planting, pre-winter assessment of the crop condition.

Watch this space for tour updates.

Friday, 4 September 2020

Russian ag ministry reviews how their farming is doing

Russias Ministry of Agriculture held a meeting this week, to review activities of 2019, and outline the strategic objectives for 2020.

In attendance were Deputy PM Viktoria Abramchenko, Minister of Agriculture Dmitry Patrushev, and representatives from regional governing bodies, federal authorities, supervisory agencies, unions, scientific and banking communities, and public organisations.

Abramchenko said that one of the most important tasks was to increase exports, and pointed out that Russian agricultural products are supplied to 160 countries in the Middle East, East and South Asia, Africa, the EU, and the CIS.

She went on to say the target was to double agro-exports by 2024 and key to this was bringing unused agricultural land back into circulation.

Last week, the Ministry reported that since 2013, more than 360 thousand hectares of abandoned and overgrown land had been brought back into cultivation in the Moscow region alone.

You need to be cautious of these numbers, regional governors trying to remain in favour may take “abandoned and overgrown” to mean land that has only been fallow for a short time and over-report. 

However, if you are looking for an indication of what direction the worlds largest wheat exporter wants to take its agriculture, they are pretty much telegraphing it.

My view on this, if you want to expand your farming operations, the Ministry is unlikely to get in your way…too much.

Back at the meeting and it was reported that in 2019, Russian farmers harvested over 121 million tons of grain, which was the second-largest harvest in post-Soviet history.

Patrushev said despite difficult weather conditions, the current harvest stands at 101 million tons of grain, and harvesting rates and yields are well above 2019.

Not strictly true, with 25% of the wheat harvest still to go, yields are falling and approaching 2019 and 2018 levels, and could go lower.

Concluding his speech, the Minister of Agriculture said, in recent years agriculture had shown steady growth, and that they had changed the perception of farming as an unprofitable and risky industry, to that of a modern and profitable business.

That’s only one dry year away from being reversed though. 

Tuesday, 1 September 2020

UK government plans to cut red tape for farmers

The UK government says they will reduce the administrative burden for farmers to enable them to focus on delivering environmental outcomes under the new Environmental Land Management (ELM) scheme.

Previously the European Commission’s greening requirements required farmers to carry out specified practices to qualify for additional payments.

The UK plans to end the need to comply with the EU-delivered greening requirements and move towards the ELM scheme, which they say will deliver greater benefits for the environment.

The transition period will last for seven years and see Direct Payments to farmers in England phased out and replaced with a new system that rewards farmers for delivering public goods, such as tree or hedge planting, river management to mitigate flooding, and creating or restoring habitats for wildlife.

The Environment Secretary, George Eustice, said the EU greening requirements added little to the environment, which seems an odd thing to say given that Twitter is full of farmers proudly showing off their wildflower margins.

The Environment Secretary’s main focus on the benefits of the transition from an EU subsidy system to a UK subsidy system seems to be on reducing the administrative burden for farmers and vague statements about delivering public goods.

Most UK farmers I talk to readily admit that while the form filling is a bit of a drag, pound for pound it easily gives the best rate of return for hours worked.

Also defining and measuring public goods seems to me like a recipe for more red tape not less.

Further details on plans for the agricultural transition period will be set out in Autumn 2020.

Ukraine discusses harvest and food security

Yesterday, Ukraine's Ministry of Economy along with unnamed agricultural associations, discussed the grain market, weather conditions, food security, the latest harvest results, and the forecasts for the rest of the harvest.

Ukrainian agricultural producers have already harvested 41.2MMT of crops from 10.9MHA, of which cereals and legumes account for 38.4MMT.

The Ukrainian Hydrometeorological Center said dry weather and a lack of moisture in the soil has had a direct impact on crop yield, but, to make sure they cover all bases, May rains meant the forecast harvest remains optimal for domestic consumption and exports to foreign markets.

On the face of it, these endless meetings and reports of meetings, seem to serve little real purpose and look more like a hangover from former times, but it would be nice to see a broad update on food security from our own government from time to time.

Show they take it seriously. 

Thursday, 27 August 2020

Agricultural classes in school

Last year, in the Russian region of Udmurtia, four schools ran pilot agricultural classes for about 100 students. 

Demand has grown with 400 children already signed up for this year.

The educational project, initiated by the regional Ministry of Agriculture, uses specialists from agricultural enterprises as teachers.

I know there are many local and regional initiatives already in place around the world, but I think food and farming is such a fundamental issue that it should automatically be part of every school curriculum.

It would help enormously if children grew up with an awareness of where food comes from, what they are looking at when out in the countryside, and what good food looks and tastes like.

Hard as I’ve looked, I’ve yet to find a nugget on a chicken.

Ukraine harvest update

Ukraine’s early crop harvest is all but done, the latest results are as follows.

Wheat 98.9% cut, 26.6MMT, 4.09MT/HA

Barley 99.6% cut, 8.7MMT, 3.67MT/HA

Rapeseed 99.7% cut, 2.54MMT, 2.29MT/HA

Ukraine's three-year economic forecast

Ukraine’s Ministry of Economic Development, Trade, and Agriculture have adjusted their 2020 inflation forecast to 5.9%, down from their previous forecast of 11.6%.

The ministry also forecasts an average annual exchange rate of UAH27.00/USD, previously they called it UAH29.50/USD.

Other updated 2020 forecasts include a trade deficit of $5.4 billion (previously estimated at $8.3 billion), GDP UAH 3.975 trillion (down from UAH 3.985 trillion), and an increase in railway transportation tariffs by 17% this year, then 22% and 26% in the next two years.

Presumably, that rail tariff will impact on the competitiveness of Ukraine grain exports.

The ministries next three-year forecast has been approved and published by the Government, here are the headlines.

  • GDP growth 4.6% in 2021, 4.3% in 2022 and 4.7% in 2023;
  • Consumer price index 107.3% in 2021, 106.2% in 2022 and 105.3% in 2023;
  • Increase in average monthly wage 12.1% in 2021, 6.0% in 2022 and 5.1% in 2023;
  • Unemployment rate in 9.2% in 2021, 8.5% in 2022, 8.0% in 2023;
  • Growth of exports of goods and services 2.9% in 2021, 6.4% in 2022, 8.2% in 2023.

Referring to the forecasts, Economy Minister, Igor Petrashko said "further gradual acceleration of economic growth and the formation of a quality basis for sustainable economic development in the medium term, taking into account major reforms and maintaining financial stability".

But you’d expect him to say that.

Wednesday, 26 August 2020

Russian hemp

Smart Hemp Ltd. will start the construction of a hemp processing plant in Russia later this year.

The company has grown 1,250 hectares of industrial hemp in Ivanovo region this season and plans to grow up to 5,000 hectares next year.

Harvest of the current crop is now underway.

The company has been working with Rostselmash to produce a prototype forage harvester with a rotary header to harvest industrial hemp.

Smart Hemp director, Maxim Uvarov, said: “Hemp is extremely difficult to harvest, although sowing and growing it, in general, is not difficult”.

According to Uvarov, the use of hemp as a raw material is extremely wide, including the textiles industry, building materials, and the food industry.

Smart Hemp Ltd. is registered in Cyprus and incorporated November 2019.

Tuesday, 25 August 2020

Organic food production grows in Russia

Since the start of the year, 35 Russian businesses received organic production certification, and are now included in the state register of organic producers.

More than 20 of them are producers of meat and dairy products, as well as compound feed, grain, and forage crops. 

Other enterprises produce alcoholic beverages, baby food, tea, coffee, and grapes. 

Their products can now be marked with the organic logo and with the words "organic" in Russian and English.

According to the Ministry of Agriculture, there are more than 10 million hectares of unused agricultural land considered to be suitable for organic farming, under the claim that there are no contaminants or chemical fertilizer applications.

Ukraine’s President promotes investment in agriculture

Ukraine’s President Volodymyr Zelensky released a one-minute promotion video calling the country a land of opportunity in tourism, information technology, and agriculture.

Ukraine’s potential has been talked about ever since it gained independence in 1991 but has consistently failed to live up to expectations.

Foreign investors cite Ukraine’s non-independent judicial system and corruption as the main barriers to investment, something generally confirmed by anyone who has done business in Ukraine.

Zelensky praised recent reforms to land ownership, supposedly lifting the long-standing moratorium on the sale of agricultural land, but will only apply to Ukrainian citizens and companies. 

I suspect foreign companies will be looking for further liberalization on land ownership before a video tempts them in.

Thursday, 20 August 2020

Live and let die hard

Ten days ago, the Russian ministry of agriculture reported the Kursk and Belgorod wheat harvest was nearing completion and would be finished in two or three days.

Today, a large agribusiness there, told me they finished their wheat harvest, a full week after the ministry said it was already done.

When I told my contacts that the wheat harvest had officially finished there a week ago, they were surprised and told me there is still standing crop in the region.

This reminds me of the time we received a visit from the head of the local administration to tell us we were not harvesting quick enough.

He produced a piece of paper with a league table of farms and how much they had cut to date, and sure enough, we were bottom last.

I told him we didn't really care what everyone else was doing, that it wasn’t a competition, our harvest schedule was bang on target, and he shouldn’t worry.

This made him angry, so I got angry back, he shouted, I shouted, we glared at each other across the table, we'd reached an impasse.

Then, a colleague of mine piped up, "What if we 'report' we have harvested more hectares, will that be alright?"

Yes, came the immediate reply, that will be fine, smiles resumed, the atmosphere improved, the head of administration was happy, he could now report up the chain that all was well, and presumably keep his job for another season.

I mention this because it seems old habits die hard, and we still need to take official reports coming out of former soviet countries with a degree of scepticism.

Including harvest data.

Monday, 17 August 2020

Ukraine agrees wheat export limits for new marketing year

Ukraine's Ministry of Economy, along with representatives from the grain market, today agreed on the maximum volume of grain exports for the 2020-2021 marketing year.

This included wheat at 17.5MMT, and 1,000MT of rye.

The current wheat harvest is nearly finished and should produce a final yield of 27MMT, which leaves about 9.5MMT for domestic consumption, continuing the four-year trend for annual domestic consumption figures to be below 10MMT.

Between 2017 and 2019, the average annual domestic consumption for Ukraine wheat was 9.2MMT; between 2000 and 2016, average annual consumption was 12.1MMT.

I think that’s telling us something.

The ministry retained a caveat that depending on the final data on wheat harvest, the agreement may be revised in the 4th quarter.

The grain memorandum has been in place since 2011.

Belarusians stand up

After a monumental weekend in Belarus, which saw unprecedented numbers of people gather in the centre of Minsk, calling for President Alexander Lukashenko to resign, today we saw workers at a factory openly heckle him in what looked suspiciously like his Ceaușescu moment.

Events are moving at pace, but it now looks like there will be no coming back for the former collective farm manager turned defacto post-soviet dictator.

Thoughts are now turning to outside Belarus to see what others may or may not do, lets hope it’s peaceful.

Belarus produces around two million tonnes of wheat at an average yield of three tonnes per hectare, so plenty of scope for improvement should the socio-political landscape become conducive to investment.

It’s been a while since I was last in Belarus so I might be out of touch, but I suspect the biggest constraint on yields will be the low genetic potential of domestic crop varieties, and probably some outdated practices.

You can fix plant genetics almost immediately, by allowing the import of seed, then longer term by investing in plant breeding facilities.

Changing outdated practices, however, would be nigh on impossible while the president cum farm manager cum dictator was still in charge.  He was known for driving around and berating farm managers for what he considered to be bad or slovenly work.

I remember on one occasion, somewhere in the northeast of the country on a grey cold October day, talking to an agronomist, I asked him when he put his fertiliser on?  “When its delivered” was his honest reply.

Then there was the time we had a late dinner and got absolutely hammered in what turned out to be an abattoir.

So many memories, hope we get the chance to make more.

Saturday, 15 August 2020

Ukraine's wheat harvest is in the shed, almost...

As of Friday, Ukraine’s wheat harvest was reported as nearly finished (96%) at 25.5MMT from 6.3MHA with an average yield of 4.05MT/HA.

This means the final harvest figure should reach 26.9MMT, or thereabouts.

Our last forecast in July was 26.4MMT, which is within 2% of the projected final harvest figure, so we at GSAC HQ are happy with that, particularly considering the awkward COVID restrictions we had to work with. 

The chart shows how our spring forecasts worked out from March onwards, although we did make our first tour and forecast in the previous November when we assessed the condition of the newly emerged crop.  This helps us determine how the crop might survive over winter and allows us to set a basis come spring.

Our forecast success rate for Ukraine wheat over the previous four seasons now stands at 3%, meaning the average of all forecasts between March and July over each season are accurate to within 3% of the final yield.

Forecasting crop yield is not an exact science but we do spend a lot of time in the field which helps.

We will continue to refine and develop how we conduct our forecasts in the future and will take each season as a new learning opportunity.  

A bit like farming then.

I remember someone older and wiser than me, saying they had only been farming one year, but they had done it fifty times.

Drop me an email if you would like to find out more about our Black Sea crop forecasting service, or would like to subscribe, or indeed possibly join us on one of our tours.

blackseacroptour@gmail.com

Friday, 14 August 2020

This week's Black Sea agri-business news

USDA WASDE figures out this week upped Russian wheat 1.5MMT from 76.5MMT in July to 78MMT.  

Many had been anticipating a larger increase, but with 45% of the wheat harvest still to go, and the Russian ministry of agriculture continuing to hold at 75MMT, it looks like WASDE took a cautious approach.  

There are also some questions about how many hectares are out there.  

Two weeks ago, the state statistics department increased their wheat hectare estimation from 28.8MHA to 29.4MHA, and some of this increase was winter wheat, which begs the question, where had it been hiding these last eight months.  

Either way, we are still looking at a big Russian wheat crop, the second-largest ever, although given the low yields in the south, will more of the export fraction now have to be sourced from further up country?

WASDE upped Ukraine wheat 0.5MMT from 26.5MMT to 27.0MMT, and with 90% of the crop now cut it’s looking likely to be around there.

That should give an export potential of 16MMT, although don’t be surprised if that goes higher as Ukraine will need the cash unless they are bailed out by the EU or US.

Conditions elsewhere in the Black Sea and parts of Romania and Moldova are struggling with the dry conditions.

Reports from Romania that an entire county lost almost all their arable crops to drought; local authorities in Galati County are declaring the region a disaster area as 180,000 hectares are said to be affected.  

Farmers in Moldova continue to press the government for support, saying they will block roads for two hours a day for two weeks unless the government takes action; the government had previously allocated €50/HA for damaged crops, farmers say they have losses of over €300/HA.

Over in Belarus and factory workers are striking in protest to the violence being meted out by Lukashenko’s goons, who he released on the population after the initial protests following last Sundays rigged elections.  

I give it a week before he’s helicoptered out to spend his retirement in Rostov where he and Yanukovych can tell each other how unfair it all was.

Жыве Беларусь!

Tuesday, 11 August 2020

Protests!

Farmers in Moldova are protesting, they want government support after dry conditions led to widespread crop failure.

Many will have bought inputs on credit which they will now struggle to repay, plus they need cash or credit to buy inputs for the autumn planted crops.

This is the second very dry season in a row in Moldova, and we are now seeing vineyards and trees affected.

Estonian farmers are protesting the proposed deportation of nine Ukrainian agricultural workers after the Police and Border Guard Board (PPA) said they had violated quarantine on arrival in Estonia in late July.

Authorities claim the workers violated quarantine by working; the farmers say they were putting their living quarters in order when they were raided by the PPA.

Protesters in Belarus took to the streets after Sunday's election saw the long term president and former collective farm manager, Alexander Lukashenko, achieve 80% of the votes, which the opposition say is fixed.

It's reported that anger towards Lukashenko's government has been fuelled by his response to coronavirus, Lukashenko famously downplayed the outbreak, advising citizens to drink vodka and drive tractors.

While global media are showing images of protestors on the streets facing tear gas and rubber bullets, the state media is reporting the grain harvest is 68% complete.

I can’t confirm the harvest report because, at the time of writing, the state media website is off-line.

That doesn’t sound good.

Friday, 7 August 2020

Ukraine harvest update

Ukraine’s 2020 wheat harvest is 87% completed, with 5.8MHA producing 23.1MMT at an average yield of 3.98MT/HA.

This compares with 6.3MHA, 25.8MMT, and 4.10MMT/HA on the same day last year.

The barley harvest is 90% at 2.1MHA producing 7.9MMT at a yield average of 3.76MT/HA (2.40MHA, 8.1MMT, 3.38MT/HA in 2019).

Oilseed rape is 91% completed at 2.2MHA, producing 1.0MHA, at an average yield of 2.2MT/HA.

Russian harvest update

Russia’s 2020 wheat harvest has reached the halfway point, with 14.5MHA producing 53.4MMT at an average yield of 3.67MT/HA.

This compares with 13.3MHA, 48.0MMT, and 3.61MMT/HA on the same day last year.

The wheat harvest is now moving into the eastern spring wheat growing regions where there is some suggestion that hot dry weather may have reduced prospects.

We’ll find out soon enough.

The barley harvest is about a third of the way through at 3.0MHA producing 9.5MMT at a yield average of 3.16MT/HA.

Oilseed rape is about a fifth of the way through at 270KHA, 630KMT, and 2.33MT/HA.

Sugar beet harvest has started in Krasnodar with the first 2.2KHA producing 98.2KMT at an average yield of 44.6MT/HA.

Thursday, 6 August 2020

Work in progress

Way back in history, when I first set up the blog AgronomyUkraine, I was living in Ukraine mainly doing agronomy.

I no longer live in Ukraine and my remit has widened, while I still do agronomy I am also involved in other aspects of Black Sea agri-business.

So, the old name has gone, thank you very much AgronomyUkraine for many years of loyal service, and hello GreenSquareAC.

Green Square Agro Consulting Ltd is our official business name, we are an association of consultants experienced in providing practical support for agricultural projects in Black Sea regions.

We have delivered consultancy and advisory work in Croatia, Hungary, Kazakhstan, Moldova, Poland, Romania, Russia, Spain, Uzbekistan, to name but a few, but more about that later.

In the meantime, I am updating, revamping, renaming, improving, and generally redeveloping this blog to focus on reporting Black Sea agri-business news with an opinion on implications. 

Football may also be mentioned.

Mike

Friday, 29 March 2019

Our first full Black Sea Crop Tour of 2019 is in the bag

Eight days on the road, three thousand kilometres, hundreds of crop observations, dozens of tweets on our tour twitter account, two reports posted out today with our latest forecast on wheat prospects, and many questions from clients answered, we are done.

I’m fairly certain that right now, there isn’t a person on the planet who has seen as much Black Sea wheat as my team and I.

Weather conditions were much better this year, we pretty much had a clear run from Stavropol and Krasnodar in southern Russia through to Belgorod and Kursk, before we crossed into Ukraine and Kyiv, then south to Mykolaiv and Odessa.

We even managed to fit in a bit of sightseeing at the Kursk battlefield sites, downtown Kyiv and the catacombs of Odessa.

We next tour in May to look at wheat again but also corn, sunflower and soya, which will have been recently planted.

We have seats available on this tour, plus due to popular demand, we are planning on putting together mini-tours during May, June and July, fewer road miles than a full-on tour but still packed with adventure.

Drop me a line if you would like to be put on our mailing list to find out what tours will be taking place this year, and how to apply to join us.

We can also organise bespoke tours, just drop me a line to discuss your requirements.

blackseacroptour@gmail.com 

Thursday, 7 March 2019

This weeks Black Sea agri-business news

Russia’s ministry of agriculture forecast a wheat harvest of 75-78MMT in 2019, 4% higher than last year and possibly as high as 80MMT if conditions remain favourable. 

They say the overall grain harvest is expected to be 118MMT (+5% on 2018) and this growth in production will meet domestic market demand while simultaneously increasing exports to achieve the target indicators of the federal project “Export of Agriculture”.

The last part of that sentence is probably the important bit.

Following this forecast by the Russian ministry of agriculture, my inbox is full of "Russia expects bumper wheat harvest" type of news.

However, talking to one of our Russian farmers this week and he told me wheat growth stages are behind last year, soil temperatures are still very low, but more significantly, soil moisture only ran to 20cm in the soil profile.

We will be there next week to make our first independent assessment and yield forecast direct from the field.

In other bullish news, the Russian ministry report that, as of February 25, daily sales volume of milk by agricultural organizations was 44.6KMT, 5.1% more than the same period last year, and the average milk yield/cow/day was 15.94KG, 0.92KG more than last year.

The Chairman of Russia’s National Union of Milk Producers (Soyuzmoloko), Andrey Danilenko, who has been the head of the Union since its foundation in 2008, announced his departure and replacement by Stefan Duerr, President of EkoNiva Group.

Russia will adopt a new law on organic produce to regulate the manufacturing, storage, transport, labelling, and marketing of organic products; the law is seen as a legal framework for further development of Russia’s organic sector and to increase Russia’s organic exports.

It is estimated that imported organic products currently account for 80% of Russia’s organic food market and, according to the ministry of agriculture, there are 10MHA of unused land considered suitable for organic farming, under the claim that there are no contaminants or chemical fertiliser.

Ukraine’s early spring planting is underway, report the ministry of agriculture, with of 22.5KHA or 1% of the forecast (7.2MHA) now in the ground.  The spring sowing campaign started one month earlier than last year, according to the ministry, who say that favourable weather conditions give good expectations and prospects for the current year.

In a separate report, Ukraine's ministry of agriculture says 13% of winter crops are in poor condition, however considering a large part of Ukraine is still under snow and has been since November, this is probably just made up.

Ukraine’s acting minister of agriculture, Olga Trofimtseva, said the development of the livestock sector is among the long-term priorities of the ministry for 2019 and cited previous and planned state subsidies as examples of that support.

The Third International Congress Organic Ukraine will take place from March 14th in Odessa, the main topics will be Ukrainian regulations of the organic market, consumer profiles, marketing and promotion of organic products and organic production techniques.

According to Ukraine's State Statistics, as of Jan 2019, the average monthly salary in agriculture amounted to 7,340 UAH, which is 23.1% more than in the same period last year.

Kazakhstan is increasing the range of products exported to China including Kazakh lamb meat, and China is also interested in importing Kazakh-made camel milk powder.

Kazakhstan has developed a national breakfast brand including dishes such as tary and maisok (groats of millet), cottage cheese and ayran, kymyz (mare's milk), kurt (hard pressed cheese with salt), zhent, a dessert made of ground millet and dried fruits. 

Thursday, 28 February 2019

This weeks Black Sea agri-business news

Corteva Agriscience, the recently unveiled agriculture division of 2015 DowDuPont merger, announced the results of the all Ukrainian corn and sunflower yield contest.

The highest yield of a Pioneer sunflower hybrid was a farm in Kharkiv, with a variety yielding 5.30MT/HA, while the Pioneer corn hybrid winner was in Cherkasy, with a whopping 19.17MT/HA.

Ukraine's largest producer and exporter of sunflower oil, Kernel, announced that through the European Bank for Reconstruction and Development (EBRD), they have attracted project financing of $56M to upgrade existing oilseed processing plants in Poltava, Odessa, Mykolaiv and Kharkiv with biomass co-generation power plants.

Ukraine’s leading poultry producer, MHP, has purchased 90% stake in the integrated Slovenian poultry firm Perutnina Ptuj.

Ukraine’s ministry of agriculture has revised their 2018/19 grain export forecast to 49MMT from 47.2MMT; as of February 20, exports stood at 31.31MMT, 21.5% more than on the same date of the previous year.

Russian Agriculture Bank said it will provide an 18.9 billion rouble ($288 million) loan to Ekoniva, a leading agricultural holding with 500,000 ha, for the construction of a dairy plant that will allow them to reach a full capacity of processing 1,150MT of milk per day by 2022. 

The USDA estimate Kazakhstan wheat production in MY18/19 at 13.98MMT, down 0.8MMT on the previous year, citing unusually cold spring delaying planting, insufficient rains during vegetation and excessive rains during harvest.  

It’s a wonder they harvested anything by the sounds of that report.

They also see Kazakhstan’s 18/19 barley production at a record 3.97MMT and another record harvest in 19/20 at 4MMT.

We would like to make an early summer Crop Tour of Kazakhstan to assess the condition of wheat and barley and make yield forecasts from the field but we require help funding it, drop me a line if you'd be interested in sponsoring a KZ tour.

The first train of 2,200MT of wheat arrived at Urumqi in northwest China from Kazakhstan. The company said they normally use trucks to import wheat from Kazakhstan but transportation by train can save some 20 days.

Urumqi is the most remote city from any sea in the world.

Friday, 22 February 2019

This weeks Black Sea agri-business news

Kazakhstan has risen to the fifth group of country risk rankings in OECD country risk rating.

The Organization for Economic Cooperation and Development ranks all countries in the world according to eight risk categories, Kazakhstan first participated in OECD country risk rating in November 2017, at that time the country was in the sixth group.

Ukraine and the United Arab Emirates signed a memorandum of understanding to promote cooperation in agricultural, "Ukraine intends to become a strategic partner of the UAE to ensure food security of this country," said Ukraine's acting agriculture minister.

Ukrainian agricultural group, Kernel Holding announced they have acquired 100% interest in Rail Transit Kargo Ukraine for $64 million.  RTK owns 2,949-grain railcars, 15% of the market, and is the second largest grain wagon fleet after the state monopoly Ukrainian Railways.

The Food and Agriculture Organization (FAO) has launched courses to help Ukrainian farmers stop land degradation which they say affects 20% of the country's arable land, with wind and water erosion the main problem.  I’ve spent years talking to Ukrainian farmers about this with next to zero progress.

Saudi Agricultural Livestock Investment Company (SALIC) in the running to buy Australia’s biggest single parcel of farming land.  The sale is still to be approved by the Foreign Investment Review Board and involves 200,000 hectares of freehold and leasehold land over 30 separate farms for more than $70 million. 

In 2018 SALIC spent €250 million acquiring the majority of Mriya Group’s Ukraine farming assets.

Ukraine and the UK will deepen cooperation in the field of agribusiness, according to a meeting between representatives from the two countries yesterday.  

Last year Ukraine exports to the UK included 26.7KMT of sugar, 452.6KMT of corn and 40.9KMT of wheat.

Ukraine will host a pavilion at the largest food exhibition in Asia, FOODEX Japan 2019, promoting products from 13 Ukrainian manufacturers. 

The USDA Foreign Agricultural Service report the prolonged dry period in Romanian late last summer and throughout the autumn meant some regions did not see rain from July through November and many farmers changed their cropping plans.  

Canola planting stood at 550KHA, down 23% from the previous year with estimates that 250KHA to 350KHA is in poor condition and some will be replanted with spring crops.

Russia's Ministry of Agriculture outlined priorities for the development of agriculture in the Volga Federal District, including increasing the production of grain, leguminous plants and oilseeds, and liming 12MHA of agricultural land. 

According to experts, by 2024 this will allow an increase in grain yield by 10MMT and oilseeds by 2.5MMT.  The region grows about a quarter of Russian oilseeds and potatoes, about 20% of grain, leguminous crops and vegetables, as well as more than 16% of sugar beet.  Last year, the region harvested a record-breaking sunflower crop - 4.6MMT - which was one-third of the whole country.  This year, the area of winter crops for grain and green forage increased to 4.56MHA, with, its reported, 90% of them in good and satisfactory condition.

Still hearing reports of a grain hauliers strike in southern Russia and that it is expanding; drivers are protesting against low rates unless they overload their trucks, then road police stop them and fine/bribe them leaving them at a loss.

Saturday, 16 February 2019

This week’s Black Sea agri-business news

Dmitry Rylko, Director-General of Russia's Institute for Agricultural Market Studies (IKAR), forecasts the 2018-19 Russian wheat harvest at 76.5MMT, up from 2017-18's 72.0MMT.

The Russian Ministry of Agriculture predicts an increase in the 2019 grain harvest to 118MMT, the minister said latest data gave grounds for raising the forecast to 118MMT, which is about 5% more than last year and will meet domestic needs and increase export potential.

At a meeting with representatives of the largest domestic grain exporters, the Russian Minister of Agriculture, Dmitry Patrushev announced they are setting up a new association of grain exporters to represent the interests of the main exporters. 

The minister urged participants of the meeting to join in with the work to create the association which will be created April of this year and is necessary to understand the general trends and demands of the market. 

It was noted that cereals remain the key domestic agricultural products supplied abroad, and the minister stressed that the ministry does not plan to impose any restrictions on the export of this crop.

It was reported that, in the current agricultural year (2018/2019), Russia increased its deliveries by 3%, to 32.6MMT, and wheat exports grew by 11% and amounted to 27.3MMT.

According to forecasts of the Ministry of Agriculture, the export potential of the grain remains at 42MMT, including 37MMT of wheat, which will ensure supplies to meet the demands of the domestic market.

The Russian government has published information on 12 National Projects to be implemented through to 2024, these include agricultural exports which they plan to increase twofold to $45bn by 2024.

In the immediate future, Russia plans to export agricultural products worth $24bn in 2019 and $28bn in 2021, (Russian 2018 agricultural exports provisionally total $25.9bn according to the Agriculture Minister)

For the record, those projects are; 1. Digital Economy, 2. Ecology, 3. Labour Productivity and Supporting Employment, 4. International Cooperation and Export, 5. Education, 6. Culture, 7. Small and Medium Businesses and Support for Business Initiatives, 8. Healthcare, 9. Demographics, 10. Safe and High-Quality Roads, 11. Housing and Urban Environment, 12. Science.

Russia’s Deputy Minister of Agriculture, Oksana Luth reported that Russia started exporting poultry products to China, and dairy product exports could start in the middle of the year.

Russia, Kazakhstan & Iran signed a memorandum on cooperation in wheat trading, allowing private & state companies to import wheat to Iran for processing & export to third countries, & export of processed wheat from Iran by flour producers, Iranian exporters and/or joint ventures.

Latest global data on organic farming released at BIOFACH this week by the research institute FiBL and IFOAM includes the following headlines: Global organic area reaches all-time high; Nearly 70MHA of farmland organic; Global organic market worth $97 billion; Almost three million producers worldwide.

BIOFACH is the organic trade fair which took place at Nuremberg this week; both Russia and Ukraine were represented with senior ministerial delegations attending.

Russia reports that the volume of the domestic organic market currently stands at 160 million euros, but given the potential of Russia for arable land, as well as the demand for such products, the Russian market may reach 5 billion euros by 2025.

Ukraine reports that the purpose of the official delegation at the exhibition is to present the Ukrainian organic agricultural sector internationally, build long-term partnerships with state authorities of other countries and participants of the organic market.

A new World Bank report on Ukraine argues that reforms in three areas are needed: 1) creating supportive conditions for the private sector; 2) addressing corporate debt; 3) strengthening markets by lifting the moratorium on agriculture land sales.

Ukrainian sugar beet area is forecast to drop 20% to 220,000HA in response to low sugar prices, according to a source from the National Association of Sugar Producers.

Ukraine ministry report field works have started with the first fertiliser being applied to 8% of the winter wheat crop, 11% of the winter barley and 19% of winter canola. They also report winter crops are in the best condition for the last five years.

Tuesday, 12 February 2019

Would you like to join us on our next Black Sea crop tour?

We have been conducting regular crop tours across Russia and Ukraine since 2014 and we are now opening our latest tour for interested parties to join us.

We currently have space available and we are inviting applications from individuals or companies.

The next tour will start in Moscow on Sunday 10th March and finish in Odessa on Sunday 17th March.

This is a unique opportunity to visit, travel, and gain insight into the key Black Sea grain producing regions in a safe and supported way.

The aim of the tour is to achieve a clear assessment of winter wheat and as such we will make regular stops along the route to visit fields.

The route will cover approximately 2,800km by road starting in the southern Russian town of Stavropol before heading north through Rostov-on-Don and Belgorod then crossing the border into Ukraine heading west to Kyiv and south to Odessa on the Black Sea.

We also plan to make some farm and machinery visits and meet with key people to discuss current conditions and farming in general in the Black Sea region but will confirm if this is possible.

We have covered this route many times and are completely familiar with all that is involved, and we have chosen good hotels...where we can.

At the end of the tour, you will have gained an appreciation and understanding of Black Sea agriculture and farming and how the regions of western Russia and Ukraine contribute.

If you think this is something that would be of interest or would like to discuss this further, feel free to drop me a line.

blackseacroptour@gmail.com

Black Sea Crop Tour 2019

Our next Russian-Ukraine crop tour is planned for 10th - 17th March when we will travel three thousand kilometres to assess the post-winter condition of Black Sea wheat. 

We will then make a wheat yield forecast based on crop scores and field observations.

Further tours will take place throughout 2019 to update our wheat forecast and make projections on corn, soya and sunflowers.

During each tour we run a member's Twitter account so you can see the crops and read our comments from the field, we also provide full reports at the end of each tour.

You can include five individuals on each account, allowing you to add colleagues or provide your clients with complimentary access.

Full season membership for this independent service is only £375.

Register your interest or ask any questions by emailing blackseacroptour@gmail.com

Thursday, 7 February 2019

First Black Sea update of 2019

The 35-day-long US federal government shut down ended but it did mean no USDA numbers in January and eyes are now on the February figures released later today.

As a reminder, the last USDA figures out in December for the 2018-19 crop put Russian wheat at 70MMT, Ukraine wheat at 25MMT and Kazakhstan at 15MMT.

Generally, as we all know, USDA figures are a bit of a guess but we at Green Square do at least get in a car and go and have a look.

Last November we toured several thousand kilometres across Russia and Ukraine to look at the pre-winter condition of the 2019-20 wheat crop.

We do this primarily to assess the ability of the crop to stand a cold winter should there be one, more than to make a credible yield projection, but it does help with our later forecasts when we have followed the crop throughout the entire season.

For the record, in November we pegged the 2019 Russian wheat at 75.0MMT and Ukraine at 25.5MMT.

Unfortunately, we don’t yet tour Kazakhstan, we’d like to if we can raise the funds but there wouldn’t be much point in November anyway as they mainly grow spring wheat.

Email me if you would like to receive copies of our November reports or any of our reports from last season.

The winter so far seems to have been normal, there has been plenty of snow across most of the Black Sea since December, protecting crops from low temperatures, although temperatures haven’t been especially low.

Before the winter we assessed over 90% of Russian and Ukraine wheat to be in good condition, which meant there shouldn’t be any issues with winter kill given the snow cover and reasonable temperatures, the agronomist in me took to the winter break content that crops would be alright.

There are, however, a couple of issues that are worth a mention.  First off, back in November, we commented that although the wheat crop was up and away, it was dry and while this winter's snowfall will help replenish soil moisture reserves, spring rains could be crucial in maintaining the current yield potential through to harvest.

Secondly, snow has been absent in the southern Russian grain producing regions of Stavropol and Krasnodar and my contacts there are talking about downgrading their yields if they don’t get some moisture soon.  I also have some unsubstantiated reports that there is a similar situation in the very far south of Ukraine.

Not exactly a catastrophe yet but well worth keeping an eye on particularly as Stavropol, Krasnodar and southern Ukraine are near the black seaports where the first new crop wheat originates from.

Further west in Moldova and Romania and the crop there struggled to emerge in dry soils, I was last there in December and although the wheat seeds had germinated, they hadn’t emerged and were sitting dormant in the sub-zero soils.  One of my contacts in Romania reported last week that there was no change.

Back at Green Square HQ and we are gearing up for our first tour of the season, scheduled for mid-March when we will travel right across the grain growing regions of Russia and Ukraine and make our first post-winter crop assessment and credible yield forecast.  We will be posting pictures on our subscriber’s Twitter account and will follow up with post-tour reports.

Drop me a line if you would like to sign up or would like further details on our full 2019 Black Sea Crop Tour service.

blackseacroptour@gmail.com

Tuesday, 10 April 2018

First Black Sea Crop Tour of the season completed

We have completed the first Black Sea Crop Tour of 2018 and I don't mind admitting it was a tough one.

It started off well in southern Russia, great weather conditions, big beautiful fields of wheat, dry soil and balmy temperatures meant crop touring was a pleasure.

Then we turned north and that's when things turned challenging.

We left Rostov nice and early to cover the 800km we had planned for that day to Kursk, a necessary route if we want to cross into Ukraine as border crossings further south are either closed or not considered safe. 

It took us five hours to cover 100km because...well I'm not entirely sure because of what, there was a bit of snow and a few minor roadworks but nothing you would consider capably of causing a 100km tailback.

Then the weather really started to deteriorate, freezing rain, frozen roads, near zero visibility and we still had 700km to go to get to Crop Tour HQ.

We pressed on arriving late in the evening for much appreciated food and rest before heading out the following morning to cross the border in to Ukraine on foot, dragging our possessions through the snow like defeated Napoleonic foot soldiers.

While the border crossing was freezing (it's all outside with no protection from the wind), it was fairly straight forward, the guards even cracked a few jokes and didn't seem too phased I had two chaps from Australia with me who were tagging along to get a view on Black Sea farming.

Conditions in Ukraine didn't get much better but at least the snow filled in some of the pot holes making travelling slightly less bone shattering.

We made Kyiv that evening and Odessa the following day with no let up in the weather.

Fortunately(?) I had to drive back to Kyiv and surprisingly snow had started melting overnight making some crop observations possible.

Our route covered 3,300km through Krasnodar, Stavropol, Rostov, Voronezh and Kursk in Russia and Sumy, Poltava, Kyiv, Cherkassy, Kirovograd and Odessa in Ukraine and we did meet with several farmers and traders to discuss their views on the season so far.

All in, using what observations and results we could make, having our autumn tour data to help and keeping an eye on crops throughout the winter we have been able to project a wheat forecast for Russian and Ukraine and the latest reports are now available.

If this is of interest to you or you would like to receive our reports then drop us an email at blackseacroptour@gmail.com and we will arrange an invoice, season long service is priced at £375.

We tour again in May to update our wheat forecast and assess the post planting condition of the spring crops, hopefully under less challenging conditions.

Sunday, 4 March 2018

The first Black Sea Crop Tour of 2018 starts in two weeks

The first Black Sea Crop Tour of 2018 kicks off in two weeks time on 19 March.

Before then however, I’m busy on a couple of other projects that take me to Moldova next week and something to do with sugar beet in Russia the week after.

Consequently, the blog is likely to remain silent until the tour is over, numbers have been crunched, reports written and emailed out to our very kind, wise, successful and hugely attractive clients.

If you too would like to be successful and hugely attractive, drop me an email (blackseacroptour@gmail.com) to register your interest in signing up to receive our season long and impartial crop updates from the Black Sea region.

In addition to the reports, which include our crop forecasts, you will gain access to our members only twitter account where I will post frequent updates, pictures and video’s during the tour, so you will be able to follow our findings, opinions and results as it happens.

Be the first to know with certainty the real condition and prospects for this year’s Black Sea wheat crop.

Wednesday, 28 February 2018

This week's Black Sea agribusiness news in brief

Russia’s Deputy Minister of Agriculture spoke with representatives from Russia’s freight and rail transportation business this week and told them that this year’s grain exports would be over 45MMT.

He also said the strategy now is not to buy up and store, but to create conditions for the export of surplus, you have been warned.

He pointed out that domestic consumption, which stands at 72MMT, is increasing at about 1MMT per year, all the rest is export potential, but the number of grain-wagons is insufficient to ensure the uninterrupted transportation of grain by rail.

To support exports the Russian Ministry of Agriculture implemented financial support on grain rail transport and have currently agreed reduced tariffs on 756KMT of grain.

In the current Marketing Year, as of February 21, Russia had exported 33.5MMT of grain, up 40% on the same period last year (24.0MMT), including 26.2MMT of wheat (+ 41%).

Low temperatures continue to make the news across the Black Sea and Europe and will undoubtedly have an impact on yield prospects, the question is by how much?

I had a phone call earlier this week with George Auger, an UK independent agricultural advisor, who had just returned from southern Russia, he said in the Stavropol region it was noticeable how wheat looked thin, burnt and was suffering with the low temperatures and lack of snow although further north into Rostov things didn’t look too bad.

I also received updates from central Russia this week that showed wheat nicely tucked up under a recent blanket of snow, although we have some concerns that beneath the snow wheat is locked up in a layer of ice from the previous thaw.  While only 400km further south in Ukraine, there is no snow and wheat is fully exposed to the elements.

Clearly the impact of weather across the Black Sea region is variable and is continuing to develop but we will have a fuller picture once we complete or annual crop tour later in March.

Elsewhere, Russian farmers have purchased 7.5% more fertiliser January and February this year than the same period in 2017 and probably would have started applying it by now if weather conditions had improved.

Last week we reported Ukraine farmers had started applying fertiliser to overwintered crops, this week it's official with the Ministry of Agriculture reporting the first 592KHA of fertiliser had gone on in 16 regions of Ukraine.

Russia’s Ministry of Agriculture report January 2018 pig live weight production amounted to 308.4KMT, 12.6% more than a year earlier.

They also report January live weight production of poultry was 521KMT which is 8.9% more than in the previous year and the production of eggs was 3.1 billion, up 1.5% on last year.

On Monday China’s General Administration for Quality Supervision, Inspection and Quarantine (GAQSIQ) lifted a ban on wheat imports from six Russian regions which had been in force since 2016.

The ban was lifted for wheat supplies from Novosibirsk, Amur, Chelyabinsk, Omsk, Krasnoyarsk and Altai regions of Russia.

EU announced a project to support cross-border cooperation between agricultural producers in Ukraine and Moldova to promote innovative farming methods and to improve quality of products.

I’m off to Moldova next week (no blog update), I’ll let you know about the quality of products and any innovative farming methods I see.

Thursday, 22 February 2018

Cold weather elevates risk to Black Sea wheat

Russia’s Minister from Nizhny Novgorod region reports the condition of winter crops do not give him any cause for concern and they are good and satisfactory.

Over in Ukraine and the Ministry of Agriculture report 87% of winter crops in good or satisfactory condition and give a cautious prediction that winter dormancy was without significant losses.

The French Agricultural office reported that 84% of winter wheat was in good or excellent condition compared to 95% in early December and 92% last year.

This might all be about to change next week as very low temperatures are forecast for Europe and the Black Sea. 

Parts of Black Sea farmland currently has little or no snow and plants had broken dormancy earlier this month so it’s safe to assume some crops will now be at elevated risk of damage from the cold.

I don’t think we will see wholesale crop death, but I do believe it will put a dent in yield prospects which had been running high after a good planting season and easy winter up to this point.

Our first crop tour of the 2018 season kicks off 19th March, so we will be well placed to assess the condition of Black Sea wheat, see if there is any cold damage and what the implications might be (sign up to the crop tour service to receive copies of our findings).

Ukraine farmers in the south of the country had started applying fertilizer to over wintered crops, which is about 2-3 weeks early than usual but then stopped due to wet weather.

We have no reports or sightings of farmers applying fertiliser in southern Russia, recent rain there made land unfit to travel but crops are actively growing in Krasnodar and Stavropol so given a dry spell (which is forecast) we anticipate any time in the next week which will be about a week earlier than last year.

This week's Black Sea agribusiness news in brief

Russian wheat exports hit their highest weekly total since before Christmas because, they say, weather issues subsided.

My information tells me the weather in January was pretty good, so it was more likely the annual winter holidays that covers most of the month that was to blame for sluggish trade.

Preferential rail subsidies for grain transportation continue to gain traction in Russia with rates now agreed on 656KMT of grain.

EcoFarming LLC have signed agreement with Moscow authorities to build a new 8,000 head goat dairy and processing complex to eventually produce 4,000 tons of milk, 400 tons of cheese and 100 tons of meat.

Agrokultura Group will receive a 25% subsidy for the construction of the third stage of a greenhouse complex in Kashira near Moscow which will be used for the production of tomatoes, peppers and eggplants.

Ukraine’ Min of Ag report on spring sowing preliminary data; the 2018 crop area is comparable to last year and is expected to reach 27.2MHA including 14.6MAH (54%) of grain crops which they say "corresponds to the norm of the optimal ratio of crops in crop rotations" (what the heck is the norm of the optimal ratio?).

The European Bank for Reconstruction and Development (EBRD) is promoting Ukraine grain logistics with a $50M loan to support Nibulon Group’s ongoing investment programme which includes three new river terminals; expansion of fleet (floating crane, tugboats, barges, dredging vessel); 42KMT storage facility; barge quay and a new railway at Mykolaiv.

Ukraine's Odessa region is to develop green tourism by offering visitors tours to authentic Ukrainian villages and farms, as well as sightseeing in grain and lavender fields.

Apparently Ukraine has lavender fields although none of us have ever seen any.

UK National Farmers Union elect new President

This week the UK National Farmers Union (NFU) held their annual conference and elected Minette Batters as their new President, with Stuart Roberts Vice President and Guy Smith Deputy President.

At the same conference the Secretary of State for Environment, Food and Rural Affairs, Michael Gove gave a well-polished speech that essentially reiterated what he said at the Oxford Farming Conference in January; that he had farmers backs through the forthcoming difficult EU exit transition period and you could trust him.

Considering he was a leading champion for Brexit it was odd he now said he wanted to solve the shortage of labour to pick fruit and veg created by Brexit by allowing foreign farm workers to stay.  It was even odder the delegates applauded him when he said this. 

I will never understand politics.

Wednesday, 14 February 2018

This week's Black Sea agribusiness news in brief

According to Reuters, Chinese corn buyers are cancelling orders from the US and are switching to Ukraine as Beijing tightens controls on processing GM varieties.  

It was unclear how many shipments had been affected, but one source said up to four cargoes totalling 210KMT and worth about $40 million had been cancelled last month.

The World Bank announced it is rolling out crop receipts across Ukraine to expand access to finance for small scale farmers.  

Crop receipts are a pre-harvest financial instrument which allows farmers to use future harvests as collateral allowing them to purchase seeds, fertiliser and chemicals.

The European Bank for Reconstruction and Development (EBRD) have also agreed to provide financial assistance in Ukraine, this time for the construction of the first stage of a 72MW solar plant on the site of a former chemical plant in Lviv, Ukraine.  

I’m sure solar power makes sense in Ukraine but if it was me, I’d fund the development of biomass production around each major conurbation which could then provide power and central heating.

Russia has presented a new doctrine on food security to the Public Council at the Ministry of Agriculture with the Chair of Council saying, "This is a strategic document that will determine the development of agriculture for the next 10 years, which will make it possible to take agriculture to a new level."

The Director who presented the doctrine said it includes measures to stimulate development of exports, improve quality of food, increase volume of grain processing, formation of production clusters, development of agricultural cooperation and a network of wholesale distribution. 

It sounds like it could be significant, and we should all endeavour to get a copy, translate it and read it.

One point of interest I did spot was an apparent U turn to previous announcements that Russia wanted to extend import substitution policy to include seeds when the Director of Department of Plant Production spoke about measures to improve the regulatory framework and procedure for importing seeds into Russia.

New Zealand’s Fonterra cooperative is to expand its business in Russia by acquiring a 49% stake in a St Petersburg-based joint venture with Foodline.  

The investment is not without controversy as it appears to indicate a change in trade policy by New Zealand after previously standing with the EU, US and others who had imposed sanctions on Russia in response to the annexation of Crimea and conflict in Ukraine.

Remote sensing of Russian and Ukraine snow conditions showed thawing across major winter wheat growing regions last week, it’s unlikely to have much impact on yield prospects at this stage as temperatures are relatively mild but we will know more in March when we kick off our first Crop Tour of the 2018 season.

Finally, on a sad and sobering note, there are no reported survivors from the Russian passenger plane, believed to be carrying 71 people, that crashed Sunday afternoon shortly after taking off from Moscow.