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 

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. 

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.

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.

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.

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

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