Friday AM Black Sea agribusiness news

The Belarusian Ministry of Agriculture will respond to complaints lodged by the Russia food safety watchdog, Rosselkhoznadzor, after representatives of the Russian agency inspected several Belarusian enterprises.

This is part of an ongoing spat between the two countries which has resulted in Russia banning imports of many Belarussian products over food safety concerns which has been rigorously denied by Belarus.

Ukraine’s Prime Minister has pledged to create favourable conditions for Chinese businesses in Ukraine saying he is committed to sparing no effort to create conditions for effective cooperation and there is talk of creating China's first modernized agricultural park in Ukraine, whatever that is.

Worth reminding ourselves that back in 2013 China announced (here) they had reached an agreement with Ukraine to buy three million hectares of farmland which was immediately refuted by Ukraine saying it had all been a big misunderstanding and what they had actually agreed to was to investigation cooperation in a three thousand hectare drip irrigation project, so I wouldn’t take too much notice of these announcements until something concrete happens.

Ukraine exported 10.5mmt of grain in the first quarter of 2017, 18% more than the same period last year making 2016/17 grain exports a record high.

Belarus has planted 823,300 hectares of spring cereals and pulses so far or 88% of the forecast which is about the same as last year.

Russian Agriculture Minister Alexander Tkachev said on Wednesday that Moscow hoped to reach a compromise with Turkey over grain exports within two weeks.

Russian pig production continues to rise with a 5.3% increase in the first quarter of 2017 for pigs for slaughter in live weight compared to the same period last year and amounted to more than 1 million tonnes.

Russia seek grain exports compromise with Turkey

Reuters are reporting the Russian Agriculture Minister, Alexander Tkachev, as saying Moscow hoped to reach a compromise with Turkey over grain exports within two weeks.

Turkey is the second largest buyer of Russian wheat after Egypt and the top buyer of its sunflower oil so the pressure is on to find a resolution.

Turkey implemented a de facto ban on purchasing Russian grain by imposing high import tariffs in March.

Tkachev said a delegation of Russian officials plan to discuss agriculture supplies with officials in Ankara on Thursday, report Reuters.

Black Sea crop tour planned for next month

With Russia and Ukraine spring planting well underway we are turning our thoughts to the next crop tour of the season.

During the latter part of May, I will tour across Russia and Ukraine to look at the emergence and condition of corn, sunflower and soya crops.

At the same time, I will also look at the condition of the cereals, primarily wheat and will be talking to several farmers to see how the season has panned out so far and how they see harvest working out.

During the tour, I will be posting pictures, video and commentary on a subscribers Twitter account so you can see what we are seeing and I will follow this up with a full report including production forecast for the main crops.

The subscription cost is £350 which will also give you access to the other tours planned for later this season.

If you would like to support us and follow the only independent crop tour operating in the Black Sea region or you have any questions then drop me a line (blackseacroptour@gmail.com) for subscription details.

Russia's concessional agri-loans project turns to IT

The Ministry of Agriculture of Russia are having another go at pushing through their concessional agri-loans projects, this time by turning it into an IT project.

Back in January, Russia’s Ministry of Agriculture and the state agricultural bank, Rosselkhozbank, signed an agreement on the implementation of preferential crediting for agricultural enterprises but it appears the banks are dragging their heels implementing the scheme.

To address the problem the Russian Ministry of Agriculture is developing an information system to automate and speed up the loan application process by eliminating paper work.

Now "Russian Ministry" and "eliminating paper work" are not two phrases you normally see in the same sentence so I'm not entirely how that's going to work out.

Plus we can all think of our own government departments that have turned to technology in an effort to speed up and streamline the process only to find that it ends up doing precisely the opposite.

Undaunted, the Ministry is forging ahead with a pilot version which will be launched later this week.

"The use of information system will optimize the registry processing" said the Director of Development Department and the management of public information resources, Igor Kozubenko.

Do you want to tell Igor or shall I?

Russian spring field work underway in all regions

Spring field work is being reported as underway in all Russian regions including the Siberian and Ural federal districts.

As of April 25, Russia spring sowing stood at 6.7 million hectares, or 12.6% of the forecast.

Spring cereals and legumes seeded on an area of 3.8 million hectares or 12.3% of the target area including 1.8mh of spring barley, 469kha of spring wheat and 807kha of corn.

Sunflower planting stands at 1.0mha or 14.4% of the forecast and soybean at 52kha or 2.3% of the forecast.

Sugar beet stands at 645kha or 57.2% of the forecast, potatoes 34kha or 10.2% and 38kha of vegetables or 18.7% of the forecast.

Latest USDA weather update for western FSU

Moderate to heavy precipitation alleviated lingering dryness concerns in Ukraine and sustained favorable crop prospects in Russia.

A slow-moving storm system produced 10 to 80 mm of rain and wet snow from Moldova and south-central Ukraine into central Russia, while a trailing cold front triggered light to moderate showers (5-25 mm) in southern Russia.

The precipitation in Ukraine continued to improve wheat prospects following a protracted dry spell during late winter and early spring.

In southern Russia, soil moisture supplies for vegetative winter wheat remained good to excellent.

However, the wet weather hampered summer crop planting across Moldova, southern Ukraine, and much of Russia, while corn and soybean planting in northern and western Ukraine was able to proceed without significant delay where rain was lighter (less than 5 mm).

In the storm’s wake, chilly weather (3-6°C below normal) settled over much of the region, though the accompanying hard freezes (-10 to -2°C) likely had little widespread impact on agriculture.

Latest USDA weather update for eastern FSU

Mild, showery weather kept soils favorably moist for early spring grain planting.

Across central Russia and neighboring portions of northern Kazakhstan, this season’s snowpack melted during the early to middle part of April, allowing producers to begin preparing fields for spring grain sowing.

During the past week, light to moderate showers (2-15 mm) maintained good soil moisture for early wheat and barley planting, while temperatures up to 5°C above normal ensured there was no late-season snow to impede early fieldwork.

Farther south, 10 to 30 mm of rain maintained adequate to abundant moisture reserves for vegetative winter wheat in Uzbekistan, while late-season mountain snow boosted irrigation reserves for early cotton planting and establishment.

Latest USDA weather update for Europe

Increasingly dry conditions in western Europe contrasted with beneficial rain in central and eastern areas.

A persistent ridge of high pressure maintained mostly dry weather from southeastern England and France onto the Iberian Peninsula.

Short-term dryness has become a concern in southeastern England, France, and - to a lesser extent - western Germany, with rainfall over the past 30 days totaling 10 to 50 percent of normal.

However, winter wheat and rapeseed were still in the vegetative stages of development and yield potential had not yet been adversely impacted.

In Spain, longer-term dryness (10-50 percent of normal over the past 60 days) and warmer-than-normal temperatures (up to 7°C above normal) have adversely impacted wheat and barley in the reproductive (north) to filling (south) stages of development; as a result, yield expectations have likely been reduced.

Meanwhile, a series of slow-moving storms brought widespread soaking rainfall (10-75 mm, locally more) from central and southern portions of Germany and Poland into the Balkans and eastern Italy.

The wet weather slowed the planting of summer crops (corn, soybeans, sunflowers, and cotton) but maintained excellent moisture supplies for vegetative winter grains and oilseeds.

Russia plant 6.4 million hectares

As of April 24 Russia spring sowing stood at 6.4 million hectares, or 12.2% of the forecast.

Spring field work began in all regions, except for the Siberian and Ural federal districts.

Spring cereals and legumes seeded on an area of 3.7 million hectares or 11.9% of the target area including 1.8mh of spring barley, 427Kha of spring wheat and 793kha of corn.

Sunflower planting stands at 997kha or 13.9% of the forecast and soybean at 52kha or 2.3% of the forecast.

Sugar beet stands at 629kha or 55.7% of the forecast, potatoes 33kha or 9.9% and 37kha of vegetables or 18.4% of the forecast.

Monday AM Black Sea agribusiness news

Russian Ministry of Agriculture say the total volume of issued credit resources for seasonal field work rose to 104.76 billion roubles, which is 13.3% more than in the same period last year.

As of April 20, Russia spring sowing stood at 5.8 million hectares or 11% of the forecast.

As of April 21 Ukraine spring sowing stood at 2.8 million hectares or 39% of the forecast.

Dagestan takes second place in Russia for rice production.

Belarusian farmers started planting spring rape for the 2017 harvest with 3,000ha planted so far.

Paris-listed AgroGeneration, which farms about 100,000 hectares in Ukraine, reported full-year (EBITDA) earnings  of €19.4 million for 2016, dipping from €19.9 million in 2015.

Russia’s largest vertically integrated agriculture holding company, Rusagro Group, which farms about 600,000 hectares, reported Q1 results for sugar up 26%, meat up 31%, agriculture up 9% with oil and fat segment down 25 %.

Ukraine's Ministry report cool weather did not affect yield of winter and spring crops

Ukraine’s Ministry of Agriculture report that this week’s cold weather did not significantly affect the yield of winter and spring crops.

Although it's probably too early to tell with certainty and the Ministry admit they haven't actually checked crops yet, but I tend to agree.

It might have hurt winter barley which we noted looked poor on our last crop tour back in March and oilseed rape would be at risk although most of that is grown in west Ukraine and escaped the worst of the weather front.

The Ministry do say there are questions about perennial crops which are in the flowering bud stage such as apricots, cherries and peaches. 

Russian agribusiness news in brief

Russia’s Minister of Agriculture gave a report on the priorities for agricultural in 2017 which include increasing efficiency of state support, credits for farmers, technical renovation, developing new farm lands, improving rural life, soil cultivation, selection and genetics, and agricultural cooperation.

Russia’s Deputy Minister of Agriculture has highlighted the development of domestic seed production as a priority during a meeting on improving seed variety testing with 55 representatives from the research organisation FGBU Gossortkomissiya.

Russian milk production increased by 1.5% in the first quarter of the year compared to last year and reached 6.41mmt.

Russia’s Minister of Agriculture held a working meeting with the heads of the major oil and fat enterprises during which he said the oil and fat industry is one of the most successful in the Russian agro-industrial complex and that Russia ranks second in the world in terms of export of sunflower oil.

USDA assume 2017 weather will be closer to average than 2016, and forecasts Russia’s 2017 grain and pulses production at 110mmt, a seven percent decrease from the 2016 crop but higher than the previous five-year average of 98mmt.

Cold weather and snow fall on Wednesday stopped field operations across much of central Russia, forecast show temperatures returning to double figures so crops are unlikely to be affected and planting will resume without any significant delay.

As of April 19, Russian spring sowing stood at 5.5 million hectares, or 10.5% of the forecast with planting taking place in all regions, except for Siberian and Ural federal districts.

Is there a fertiliser supply problem in Ukraine?

Back in January this year I posted a blog (here) wondering if Ukraine had inadvertently engineered a fertiliser shortage.

The crux of the issue was should Ukraine delay the introduction of anti-dumping duties on Russian fertiliser until after parliament had passed a bill conferring zero duties on nitrogen fertiliser from other countries.

I signed that blog off by saying it was worth keeping an eye on the story then thought nothing more of it and, as I heard nothing else, assumed the story had resolved itself and the problem had gone away.

Then yesterday I was contacted by someone asking if I could confirm news on a fertiliser shortage in Ukraine as a contact of his in Kharkov had not received an order and the factory had closed.

While it’s not entirely unusual for suppliers in Ukraine to renege of orders (I once had a fertiliser company completely disappear, their office was literally empty when we went back) it did make me think of my January fertiliser shortage blog.

Then this morning, Ukraine’s Ministry of Agriculture announced that Ukrainian farmers are provided with fertiliser for the full range of spring field works with a whole load of statistics to back this up.

But then go on to say that farmers are worried about the shutdown of Ukrainian chemical enterprises as they must make full upfront payments for any nitrogen fertilisers orders and that farmers hoped for a quick recovery of factories to be able complete the contractual obligations to supply fertiliser in full.

Sounds like it’s still worth keeping an eye on this story.

USDA March weather summary for Europe and FSU

Europe
Near- to above-normal temperatures and precipitation during March sustained good to excellent prospects for winter crops.

The warmth (2-5°C above normal) accelerated winter crops out of dormancy several weeks ahead of normal across northeastern Europe and maintained faster-than-normal development elsewhere.

Widespread showers improved soil moisture for wheat and rapeseed from France and southern Germany into the Balkans following a drier-than-normal winter.

In Spain, dry weather in the north (25-50 percent of normal) contrasted with beneficial rain in the south (locally more than 200 percent of normal), resulting in mixed yield prospects for winter wheat and barley.

Western FSU
During march, conditions were favorable for winter wheat in Russia, while short-term drought developed in central Ukraine.

Mild, wet March weather eased crops out of dormancy in central Russia and promoted earlier-than-normal wheat development in southern portions of the country.

In contrast, pronounced dryness (10-25 percent of normal) further reduced soil moisture for vegetative winter wheat in central and southern Ukraine.

However, the dry weather allowed sowing of spring grains and summer crops to get off to an early start.

Meanwhile, locally more than twice the normal monthly rainfall in western Ukraine and Belarus boosted moisture reserves for spring grains and summer crops.

Eastern FSU
During March, seasonably cold, snowy conditions prevailed in the north while rain and snow boosted moisture supplies for dormant winter wheat in the south.

Central Russia and neighboring portions of northern Kazakhstan remained covered by a deep snowpack for much of the month as seasonal cold (readings occasionally below -20°C) prevailed over the region.

Farther south, rain and snow (100-200 percent of normal) maintained adequate to abundant moisture reserves for dormant to early vegetative winter wheat in Uzbekistan.

Latest USDA weather update for western FSU

Widespread showers maintained or improved prospects for winter wheat.

In the primary winter wheat areas of central and southern Ukraine, a second consecutive week of rain (5- 25 mm) further improved soil moisture for vegetative winter wheat following a protracted dry spell during late winter and early spring.

In southern Russia, moderate to heavy showers (10-30 mm) maintained good to excellent conditions for vegetative winter wheat and kept soils moist for corn and sunflower planting (sown in late April and early May, respectively).

Farther west, 5 to 20 mm of rain maintained good early-season soil moisture for spring grains and summer crops in Moldova, Belarus, and western Ukraine.

Latest USDA weather update for Europe

Warmer-than-normal weather prevailed, with beneficial showers in northeastern Europe contrasting with increasing dryness in western growing areas.

High pressure maintained dry, warm weather (2-8°C above normal) over the western half of the continent.

While the sunny skies promoted spring grain planting as well as winter crop development, short-term dryness (25-50 percent of normal precipitation over the past 30 days) has continued to reduce soil moisture over Spain, France, southeastern England, and western Germany.

The lack of rain is particularly untimely in Spain, where winter grains are approaching or progressing through the reproductive stages of development.

Meanwhile, a series of disturbances produced widespread showers (5-25 mm, locally more) in eastern Germany, Poland, Lithuania, and the northern Balkans, sustaining favorable moisture for vegetative wheat and rapeseed.

Dry weather from Italy into southeastern Europe promoted seasonal fieldwork, including early planting of corn, soybeans, and cotton.

Russia latest spring planting numbers

Russian spring sowing stand at 4.7 million hectares or 9% of the forecast with work underway in all regions except Siberia and the Ural federal districts.

Spring cereals and legumes seeded on an area of 2.8mha or 9% of the target area, including spring wheat on 296,500ha, spring barley on 1.5mha and corn on 403,000ha.

Sunflower plantings stand at 685,000ha or 9.6% of the forecast while soya stands at 17,300ha or 0.8% of the forecast.

There are 526,500ha or 46.6% of the forecast sugar beet planted and in Rostov the first 100ha (0.7% of forecast) of rice has been planted.

Potatoes planted on 31,400ha or 9.3% of the forecast and vegetables 33,300ha or 16.3% of the forecast.

Ukraine latest spring planting numbers

Ukraine has planted 2.6mha of spring crops or 36% of the forecast (7.2mha).

This including early spring grain and legumes sown on an area of 2.2mha or 94% of the forecast 2.4 million hectares and is made up of 155,000ha of spring wheat (86% of forecast); 1.5mha of spring barley (92% of forecast); 192,000ha of oats (93%) and 372,000ha of peas (113%).

Sunflower planting is well underway with 1.3mha or 24% from a forecast 5.4mha planted, corn is just getting underway with 342,000ha or 8% of the forecast 4.5mha, while soya planting has hardly started with 31,000ha or 2% planted thus far.

Sugar beet planting stands at 263,000ha or 90% of the forecast which to my mind seems incredibly early and makes me wonder how much of that crop will bolt and go to seed given we could still see some cold temperatures in April.

Russian banks urged to accelerate concessional loans

Back in January, Russia’s Ministry of Agriculture and the state agricultural bank, Rosselkhozbank, signed an agreement on the implementation of preferential crediting for agricultural enterprises.

Today the First Deputy Minister of Agriculture urged banks and regions to accelerate work on concessional loans.

It appears that banks, which had been approved by the Ministry of Agriculture to participate in the scheme, are taking a long time to consider loan applications and are providing borrowers with an incomplete set of documents to obtain government support.

I'm no finance expert but it sounds to me like banks are, unsurprisingly, not too keen to participate in the Ministry plan lend money at 5% when previously they would have commanded 20-30%.

Black Sea agribusiness news in brief

Russian wheat export prices were flat last week, supported by a 1.6% rise in the rouble against the dollar, according to IKAR.

Last month’s total market year grain exports stood at 27.6mmt, down one million tonnes on the same point last year.  Russian grain exports for April are expected to remain low due to Turkey no longer buying Russian grain because of Russia's unwillingness to lift a ban on Turkish tomatoes.

Ukraine’s Kernel Group is finalising the purchase of the Ukrainian Agrarian Investments holding company.

listed on the Warsaw Stock Exchange, Kernel handles about 7.0mmt of agricultural commodities per year and supplies grain and sunflower oil.  If the deal goes ahead Kernel would become Ukraine’s largest land user with a land bank of 700,000 hectares.

Ukraine has completed applying fertiliser to 7.1mha of winter grains and 872,000ha of winter oilseed rape. Spring cereal planting stand at 2.2mha from an expected 2.4mha while corn, sunflower and soya planting has started across the country.

Meanwhile spring cereals and legumes planting in Russia are reported at 2.8mha with other spring crop planting underway in most regions although the Deputy Minister of Agriculture has reported that climatic conditions in the Volga Federal District has delayed spring field works.

Kazakhstan are also reporting the late arrival of spring in the southern regions has forced farmers to revise the dates of spring field work there. 

Ukraine continues to support farming

Ukraine’s Minister of Agriculture, Taras Kutovyi, has presented the year’s results to the Parliamentary Economic Committee with the main achievements including state support, market expansion, land reform and privatization of state enterprises.

"Budget support has increased 15 times - this year is $5.45 billion - and 1% of agricultural production will be directed to support farmers, this program is fixed for 5 years" said Kutovyi.

The Minister said that Ukraine significantly increased foreign trade of agricultural products to $19.6 billion or 26% of the total foreign trade.

Other points noted by the Minister was Ukraine produced 66mmt of grain and that the agricultural sector is the driving force for the economy.

Expect Ukraine to keep producing and exporting more agricultural products.

Latest USDA weather update for western FSU

Dry weather was replaced by welcome showers in western growing areas by the end of the period.

In the primary winter wheat areas of central Ukraine, developing spring drought was abated by late-week showers (10-35 mm).

The rain improved early-season prospects for vegetative winter wheat, though southern and eastern portions of Ukraine were bypassed by the heaviest rain (amounts mostly less than 5 mm).

Farther west, widespread showers (5-30 mm, locally more) sustained adequate to abundant moisture supplies for spring grain and summer crop planting in Moldova, western Ukraine, and Belarus.

In southern Russia, sunny skies during the first half of the period favored the development of vegetative winter wheat, while late-week showers (2-20 mm) kept soils moist for corn and sunflower planting (sown in late April and early May, respectively).

Despite the generally mild spring to date, snow has been slow to melt in the Volga District, with more than 25 cm still on the ground in central and eastern portions of the region.

Latest USDA weather update for Europe

Warmer-than-normal weather prevailed, with beneficial showers in eastern Europe contrasting with renewed dryness in western growing areas.

High pressure centered near the British Isles maintained dry, warm weather (up to 4°C above normal) over the western half of the continent.

While the sunny skies promoted the development of vegetative winter wheat and rapeseed, short-term dryness (25-50 percent of normal precipitation over the past 30 days) has reduced topsoil moisture for crop development from southeastern England and northern France into western Germany.

Farther south, dryness also remained a concern for vegetative to reproductive winter grains in northern Spain, though crop prospects are better in southern portions of the country due to near- to above-normal fall and winter precipitation.

Meanwhile, light showers (3-10 mm) were welcomed in northern Italy, improving topsoil moisture for corn and soybean planting and establishment.

In central and eastern Europe, a series of weak disturbances produced widespread albeit highly variable showers (2-30 mm, locally more) from eastern Germany, Poland, and Lithuania into the Balkans.

The rain improved soil moisture in the upper Danube River Valley and maintained favorable early-season prospects for vegetative wheat and rapeseed elsewhere.

Despite the clouds and showers, weekly average temperatures up to 5°C above normal encouraged a faster-than-normal crop development pace over the eastern half of the continent.

Ukraine crop update

As of April 7, Ukraine had planted the first 4,000 hectares from the planned 1.9mha of soyabeans.

Sugar beet stood at 158kha from the planned 293kha and 348kha of sunflower from the planned 5.4mha

Early grain and leguminous crops are ​​2.0mha from 2.4mha including 134kha of spring wheat from a planned 190kha; 1.4mha of spring barley from 1.7mha and 163kha of oats from 208kha.

Peas stood at 339kha from the planned 276kha which just goes to show the concept of centrally planned cropping is in fact a myth.

Fertiliser has been applied to ​​7.0mha of the forecast 7.1mha of winter cereals and ​​859kha of the forecast 872kha of winter rape.

Ukraine looks to France to understand food markets and pricing

Ukraine’s Ministry of Agrarian Policy and Food met with French experts who shared their experiences in commodity market research, pricing and margins in the food sector.

"It is important to understand all the pricing link [between] fields to store shelves and margins for producers, processors and sellers. This understanding allows you to find a reasonable balance between all market participants and the need to provide affordable and quality food” said Ukraine’s Deputy Minister Elena Kovaleva demonstrating a clear lack of understanding how markets work in the real world.

If the retail price food was determined by the cost of production plus a “reasonable” margin then we wouldn’t have dirt poor farmers going out of business every day of the year or only functioning because of huge state handouts.

I’m not entirely sure the French or any EU country dependent on massive state handouts to subsidies farmers and food production are the best people to talk to when looking for examples of good agri-economic food pricing practice. 

My advice would be to talk to New Zealand, they have some experience of operating an agricultural policy without subsidies; tell them you're interested in buying beef livers and I reckon there'll be a delegation on the first available flight.

The long term solution to food pricing, in my opinion, is to increase the retail price of food and educate people to understand that soil has more value than gold and good food comes at a cost and takes precedent over cigarettes, magazines, booze and the latest ultimately disappointing must have piece of crap technology.

OK, maybe not booze, booze is still made out of food.

Balkan crop update

Despite low January temperatures in Croatia, winter crops are in good condition with no development issues being reported.

Winter wheat plantings are down with a final wheat area expected at around 100,000 ha with a total production forecast between 0.5 and 0.7mmt with a maximum .2mmt available for export.

Corn plantings are anticipated to produce around 2.0mmt with exports to remain high at around 0.45mmt.

In Serbia last year, the (estimated) 3.0mmt wheat crop was the largest in over twenty years giving weight to the argument that the record Black Sea and Eastern Europe harvest was largely down to the weather as much as government policy.

This year the wheat crop is reported to be 12% or 540,000 hectares smaller than last year producing an expected 2.4mmt so exports will likely be down from 1.5mmt last year to 1.0-1.2mmt this year.

Serbia's corn crop is likely to increase this year on the back of lower wheat plantings and with current good soil moisture conditions the crop should reach 7.0mmt and with 2.8mmt carryover it could once again reach the top ten list of global corn exporters.

Today in Ukraine

Ukraine held an open seminar today on reforming state support, the event was part of an EU project on the implementation of agricultural support in Ukraine. If anyone knows about state support of agriculture it’s the EU.

As if by coincidence, Ukraine’s Ministry of Agrarian Policy announced they have allocated a further $11 million for payment of subsidies to agricultural producers which brings the accumulated total in the subsidy kitty to $217 million.

Also today, Ukraine’s Minister of Agriculture met Saudi Arabia’s Minister of Transport and signed a bilateral protocol aimed at promoting business and cultural partnerships, increasing import-exports, technology exchange and attracting investment.

Ukraine was keen to offer to dairy and meat, flour, confectionery, vegetable oils and organic products to Saudi Arabia while Saudi made a proposal to invest in Ukrainian irrigation and water management projects.

Ukraine’s Ag Ministry report that in the current marketing year they may hold a 12% share in the global grain market and are currently ranked fourth in corn exports, third in barley exports and sixth in wheat.

Might be time to start considering the implications of the EU extending CAP to Ukraine and what that would do to Ukraine production and exports.

Russia to increase grain and milk production by 6% and 3% by 2020

Russia has approved amendments to the state program of agricultural development for 2013 – 2020 which cuts agricultural support from 215 billion roubles this year to 194 billion roubles by 2020. 

At the same time the programme sets the plan to increase grain production from 104mmt this year increasing to 110mmt in 2020 and milk to go from 31.1mmt to 31.9mmt.

That’s an increase of 6% and 3% respectively which looks like a number an accountant would come up with to help balance the budget.

The state program also includes rules for granting and allocating subsidies from the federal budget to the regions and will target the following areas:

• Provision of decoupled support to crop production;
• increase productivity in dairy cattle;
• contribute to the achievement of targets of regional programs for the development of agro-industrial complex;
• reimbursement of interest on investment loans in the agricultural sector;
• reimbursement of the direct costs incurred for the creation and modernization of agro-industrial complex, as well as the purchase of machinery and equipment;
• reimbursement of the cost of interest on loans obtained from Russian credit institutions and loans received in agricultural credit consumer cooperatives.

There seems to be a lot of reimbursements which will go down well with the industry but not entirely sure how that will be funded.

Ukraine's grain export infrastructure may get an investment boost

Ukraine’s State Food-Grain Corporation is a step closer to purchasing 500 of the much needed 3,000 grain wagons by the end of 2017. 

The long-term lack of investment in grain handling infrastructure is seen as a bottleneck to the expansion of Ukraine’s agricultural exports which has been compounded recently by a change in the rules reducing road haulage weights. 

As if to reiterate the issue, the New York fund Navigator Principal Investors LLC announced this week that they may invest $100 million in Ukrainian ports and Ukraine’s Prime Minister met with President of Korean Corporation Posco Daewoo during which they discussed investing in a grain port terminal.

It is a long way from a discussion to turning the key but it does illustrate that despite the perceived difficulties of doing business and political uncertainty in Ukraine many do still recognise the potential of agri investment projects.

Latest USDA weather update for western FSU

Favorable showers in Russia contrasted with increasing short-term drought in central Ukraine.

Rain (and wet snow) sustained ample moisture supplies for winter wheat development over most of southern and western Russia.

Precipitation totaled 5 to 30 mm, though amounts were less (1-5 mm) in southwestern portions of the Southern District.

In Ukraine, key wheat areas in central and southern portions of the country remained dry (2 mm or less), increasing concerns over short-term drought; precipitation over the past 60 days has totaled less than 50 percent of normal in many key wheat areas of south-central Ukraine.

In contrast, moisture supplies remained favorable across the western third of Ukraine and neighboring Belarus and Moldova, maintaining favorable conditions for corn and soybean sowing (typically planted in late April and early May).

Likewise, light showers (2-8 mm) in eastern Ukraine sustained moisture reserves for upcoming sunflower planting (first half of May).

Latest USDA weather update for Europe

Dry, warm weather promoted winter crop development as well as seasonal fieldwork over much of the continent.

With soil moisture supplies currently favorable over most major winter crop areas of northern and eastern Europe, sunny skies and above-normal temperatures (4-8°C above normal) favored the development of vegetative wheat and rapeseed from northern France and southeastern England into eastern Europe.

Furthermore, producers were able to plant small grains at a rapid pace, particularly from the Low Countries into the Baltic States.

Likewise, dry conditions over the Mediterranean coastal areas allowed citrus harvesting to gain momentum, while light to moderate showers (2-18 mm) increased topsoil moisture in northern Italy for corn planting.

Farther west, widespread showers (2-20 mm, locally more) over central and western Spain were timely for vegetative to reproductive wheat and barley, while locally more than 20 mm of rain in southwestern France boosted soil moisture for corn and sunflower planting (typically sown during the latter half of April).

US wheat in good post-winter condition

Temperatures were up across most of the United States, allowing fieldwork to progress.

Average temperatures and precipitation levels were above average throughout much of the Nation.

Areas of heavy precipitation were noted in the central Great Plains and lower Mississippi Valley, where some locations recorded more than 100mm of rainfall for the week, although dry conditions persisted in the Southeast.

On April 2, 51% of the 2017 winter wheat crop was reported in good to excellent condition, compared with 59% at the same time last year.

Since autumn, crop conditions have worsened in most of the Great Plains States with decreases in the good to excellent categories reported in Montana and Oklahoma.

Also, Kansas winter wheat condition was rated 43% good to excellent, compared with 52% on November 27, 2016.

We have completed our own independent wheat crop condition assessment for Russia and Ukraine with an initial yield forecast, the report is now available, email blackseacroptour@gmail.com for details of how to secure a copy.

Russian Ukraine crop reports now available

The first Black Sea Crop Tour of 2017 is done and dusted

During March we drove from Moscow to Odessa to assess the post-winter condition of wheat and to take make a forecast on the 2017 harvest.

Reports are now available which will also give you access to the rest of the seasons planned Black Sea tours.

Drop me a line if you would like to purchase the reports or have any questions about subscribing to our service.

Black Sea Crop Tours - the only independent crop consultancy service operating in the Black Sea region.

Black Sea agribusiness news in brief

As of April 3, Russian planting of early spring crops stood at of 1.1mha or 2.1% of the forecast and was 50,800ha more than last year.

As of March 31, Ukraine had planted 1.2mha of early grain and leguminous crops or 51% of planned area.

Russia’s accumulated fertiliser stocks including carryover from 2016 is up 4% on the corresponding date last year.

Over the first two months of this year, Russian pig production increased by 7.5% compared to the same period last and amounted to 554,200mt.

Ukraine’s State Food and Grain Corporation is holding a roundtable on the problems of grain logistics with the main discussion points including the lack of grain wagons, developing river transport and port logistics.

Ukraine, Moldova and Romania held discussions on improving cooperation on food safety particularly animal disease outbreaks, key aspects of veterinary services and cross-border cooperation.

Ukraine’s Minister of Agriculture has outlined the priorities for agricultural development by 2020 which include land reform, food safety and developing the organic market.