Around this time of
year I receive requests to put my assessment on what I think
crops in Ukraine and Russia will do.I usually resist putting a yield figure on it as generally it would be a guess based on what other people have already said.
That is until we
initiated Crop Tour.
Now that we are travelling
around the grain belt looking at crops, walking fields, measuring
and assessing plants we are starting to feel a little more confident that we could
put a yield figure forward based on more than just a feeling.
Over the course of
the last six weeks we have officially covered 5,800km in pursuit of Crop
Tour, unofficially it’s probably nearer 8,000km as we assess crops
going about our daily business.
That’s one of the
pleasures of being a farmer, every journey is spent watching fields and
farming systems role past the window and one of the reasons I prefer trains over planes.
I still have a bit
more development to do before I stick my neck out and make a call on crop
yield but before I do here's a review what’s been said over the last few weeks.
Ukraine are saying sowing
and crop yield projections are normal and good with plantings forecast to be around the
same as last year at 26mha and 90% of winter crops in good to satisfactory
condition.
They are also saying
everyone has sufficient seed, sprays and diesel and fertiliser is down only 8%
on last year.
The USDA recently
pegged Ukraine’s total 2015 yield at 55.3mmt which immediately received a rebuttal
from the Minister of Agriculture Oleksiy Pavlenko who said it would exceed
55mmt adding that the Ministry will announce its own more accurate forecast
after completion of the spring crop planting works, in the last week of May the
first week of June.
Which he means that
he doesn't know for sure, he hopes it will be more, his guys are telling him
it will be, he’ll get back to you on that one.
I don’t
understand why he contest it? The more
negative news about crops in general the more the market will react with
favourable prices and if come harvest you do have more to sell well that’s just
tickety-boo.
Anyway, my assessment
is that all is not entirely tickety-boo in Ukraine’s garden. I don’t buy the 90%
is good line, we assessed 60% to be fair to good and while we might be a little
harsh in our marking I don’t believe we are 30 points adrift.
What we saw was a
lot of thin crops which will have bulked out in the recent warm wet weather but
they are still thin crops; yield is a
function of the number of ears in a given area and spring rains don't increase the
number of ears.
I also don’t buy the
fertiliser 8% story either. During our
investigations we kept hearing numbers of 30% and while it’s not cut and dried, knowing
that fertiliser is THE single biggest crop cost then shortage of finance means
it will be hit the most.
You can’t cut seed
or you don’t have a crop, Ukraine’s pesticide usage is already low so there’s
not much to trim there, you need a minimum of diesel to plant and harvest, what
else is there to cut but fertiliser?
Across the border in
Russia we hear a similar rose tinted story from the new Minister of Agriculture Alexander
Tkachev sticking with a resolute 100mmt grain harvest.
He is saying that only the Volga, Siberian, and Ural Federal Districts showed some delays in
plantings due to weather and he believes that agrarians will manage to
plant spring crops in optimum terms.
They’ll need to
shake a leg then as each day delayed planting equates to a drop in yield and it will not be in optimum terms. Not to mention the imminent yield sapping hot dry weather heading to southern Russia from Spain.
Over the last few
weeks in addition to the Russian Ministry 100mmt figure I have heard 97mmt,
95mmt and a low from the USDA of 92mmt.
Whatever it turns
out to be I don’t know anyone who thinks it will be 100mmt.
To finish off, Elizaveta
Malyshko from UkrAgroConsult recently wrote that over the last 20 years Ukraine has faced severe crisis several times, but
never (even in early '90s) was it followed by sharp reduction of grain
acreage.
Now that's
interesting.