Latest USDA weather update for western FSU

Seasonably cold weather continued to ease winter crops into dormancy except in southern-most growing areas.

Temperatures averaged 1 to 2°C below normal over much of Ukraine and up to 5°C below normal in Russia; weekly average temperatures in Russia’s wheat belt remained below 5°C, indicating winter grains and oilseeds were now dormant.

However, southern-most wheat areas, in particular the North Caucasus and southern portions of the Southern District, continued to add vegetative growth as milder weather kept night-time readings above freezing.

In Ukraine, winter crops were approaching or easing into dormancy except along the Black Sea Coast, where milder conditions enabled additional wheat establishment.

Despite the seasonably chilly weather, the region was mostly devoid of snow cover, leaving winter wheat and barley exposed to potential incursions of bitter cold.

Russia to publish organic standards

Back at the turn of the last century I ran some training workshops on organic farming to academics, farmers and various industry bods in freezing classrooms across Russia, fortified with vodka and caviar sandwiches.

Good fun it was too but at the time I wasn't sure it was being taken all that seriously when what everyone really needed was access to affordable food which was organic anyway because no one had funds to buy chemicals or fertiliser.

So naturally I'm taking full credit for setting the seed fourteen years ago that resulted in the Russian State Duma Committee announcing the start of public comments and expert evaluations of a draft of National Standard (GOST/ГОСТ) “Regulations of Organic Production”.

That process is now complete and a new draft version of the standards is to be published later this month, with a helpful translation.

Which is timely as organics in Russia is hitting the headlines with stories that fledgling organic producers are seeing an opportunity to expand market share as sanctions restrict food imports and consumers are considering more deeply how and where food is produced.

Around the time I was talking organics with the Ruskie's I was also running a module on organics to British ag students who thought organic farming was the daftest thing they had ever heard and when was the bar open again?

Over time I think I managed to get the students to see that organics was basically a marketing opportunity, they shouldn't feel threatened by it and they could still home and spray the bejesus out of every living thing because that’s the way Dad did it but if someone else wanted to capitalise on a niche market that just left more room for conventional producers.

The organic market share in the Russian food sector is about 0.1% which seems optimistic to me as in all my years of travelling Russia I have never seen any, been offered any or to my knowledge eaten anything that was classed as organic.

I have eaten a lot of excellent, fresh, good quality, seasonal food that would have been organic in as much that it was grown without pesticides or bagged fertiliser but would not satisfy the comprehensive and ridiculously extensive list of accreditation requirements that make up most organic standards.

The Russian organic sector has failed to catch on for a number of reasons but a lack of clear organic legislation hasn't helped so this initiative to produce a set of national standards should be a step in the right direction.

I'm intrigued to see the standards and I'll update when they are released.

Latest agri-business news from Ukraine and Russia

New Holland are reporting 2014 Ukraine and Moldova sales will be down 40% on the previous year.

They say devaluation of the hryvnia and military action are the reason sales have dropped from 800 units to 500 units in 2014.

They can add to that a massive drop in commodity prices which meant many farmers have put off planned capital purchases for just one more season.

Broadly speaking a farming business should be looking to depreciate over four to six years depending on the machine; in Ukraine it’s often double that and with hard hours.

The Dutch are leading a project looking at improving the Ukrainian agricultural land market by assisting in the development of a legislative framework.

Most would agree reforms in the land sector would attract investors but it seems every government since Kuchma thought liberalisation of land ownership rights too hot to handle and kicked it into the long grass.

A moratorium on the sale of agricultural land has been in place since 2004 and was recently extended until 2016.

That may change under the latest administration who seem to want progress and it could be a way of raising revenue for a cash strapped country.

The main problem is summed up by Andriy Koshyl, president of the Land Union of Ukraine when he said “we have a problem here because we don't know today's price for our land”.

The US has published its latest update on Ukraine with all the usual gumph about capacity building and supporting democratic and constitutional reforms.

The bit that relates to agriculture is thin on detail but includes helping Ukrainian authorities to carry out reforms that will boost private sector investment in agriculture, improve access to credit and capital investment for farmers, and streamline agricultural sector regulation, all of which just sounds awesome.

The US has already committed $320 million in assistance this year in addition to $1 billion sovereign loan guarantee and last week in Kyiv Joe Biden announced they will commit a further $20 million, pending approval from Congress.

You could put another zero on the end of that and it still wouldn't be enough.

Meanwhile in Southern Russia Dmitry Medvedev is keeping himself busy today visiting a farm in Krasnodar where he will hold a meeting of the Council on Modernization of Russia’s Economy and Innovative Development.

Can’t wait to see the outcome from that talking shop.

Moving even further south and the Caucasus are being talked up as a major fruit and vegetable producer to supplying the rest of Russia in response to sanctions as it was in the good old days.

Problem is while everyone agrees it has the climate etc no one seems willing to stump up funds to rebuild glasshouses and replant the orchards that have long since fallen in to neglect.

Moscow will tighten restrictions on meat products travelling from Belarus to Kazakhstan following attempts to sell banned imports in Russia so say authorities.

Personally I think it might just be in response to comments from Alexander Lukashnko when in a strange attempt at marketing local produce said "Belarusian [food] is of substantially higher quality…there is no toilet paper in the salami and never was...such facts have been discovered at Russian enterprises - toilet paper, soy, all kinds of additives”.

He doesn't say if the toilet paper was used or not.

Uralkali accident likely to hit farmers

Uralkali is a Russian potash fertiliser producer listed on the London and Moscow Exchanges.

They export to over 60 countries including Brazil, India, China, Southeast Asia, Russia, USA, and Europe.

 

In 2013 Uralkali produced 10mmt of potash so it’s probably not overkill to say that a recent mine accident which has threatened some 2.5mmt of capacity will hit supply and lift global potash prices.

A 40m diameter sink-hole appeared at one of its mines suspending operations and further collapses and flooding have left a high degree of uncertainty over its future.

Uralkali intends to accelerating development at other mines to make up the shortfall but admit plans would take some time to realise and there would be no replacement capacity in the next three years.

Not good news for farmers already facing two seasons of low commodity prices coupled with increasing costs and restricted markets.

Uralkali shares fell 21% in Moscow on Wednesday.

Agri-news from Ukraine, Kazakhstan and Russia

Ukraine’s production and exports of cheese is expected to decrease due to Russia’s import ban

forcing processors to switch to butter and non-fat dried milk production and rely on export sales.

Imports of dairy products will also decrease due to currency devaluation although local whole dairy products production will likely remain stable supported by domestic consumption.

According to PM Yatsenyuk Ukraine is willing to expand business cooperation with Norway especially in agriculture and energy.  

He goes on to point out that Ukraine expects a 5% increase in the agriculture sector this year and this has created new opportunities for the two countries.  

Meanwhile in Kazakhstan a Chinese consortium is planning to construct a 100 million eggs poultry farm.  One of the main investors said the project is experimental and will lay the foundation for other large projects in Kazakhstan in the future.

As Kazakhstan is self-sufficient in eggs the project will presumably be targeting exports to places like China and Russia although Russia is no slouch when it comes to laying eggs holding the number one producer in Europe position.

Talking of trade the regional integration in the post-Soviet space is set to continue with the launch of the Eurasian Economic Union (EEU) on January 1, 2015.  The initial EEU members will be Belarus, Kazakhstan, and Russia, with Armenia and Kyrgyzstan planning to join later.

In other news from Russia, 660 German heifers are taking four Boeing 747 flights to the Far East to stock up a large cattle-breeding complex in Primorye.  Apparently each pedigree cow can produce up to 4,500kg of milk per year which is three times higher than the average cow; assuming you feed it with something it can actually digest.

(4,500kg, surely that’s a mistake, the average for Russia is somewhere near that.)

Make up your own joke about travelling cattle class and not wanting to be sitting next to one because they hog the arm rest.

Talking of hogs and animals on a gap year, a herd of 587 pigs has travelled from Kursk region to a modern pig-breeding complex just launched in Sakhalin.

It didn't say how they travelled but I hope they flew as its over 9,000km by road.

Dutch poultry EU paltry

In the Netherlands a 150,000 layer farm was found to be infected with the avian flu strain H5N8.

The Dutch cannot export poultry meat to markets beyond the EU for the next three months and industry leaders are saying losses could be as high as €100 million.

No problem, just tap in to the EU agricultural contingency fund, a situation I would have thought the fund was set up for.

Only problem with that is that of the €433m set aside for 2015 EU ministers have in their infinite wisdom already spent €344m bailing out farmers hit by the EU US sanctions and Russian food embargo.

A similar strain of avian flu has also been identified on farms in Germany and the UK so presumably the call on what’s left in the fund will only grow and it’s still 2014.

Sounds like this hasn't been completely thought through.

Latest USDA weather update for western FSU

Dry, warmer weather overspread the region, benefiting winter crops in areas with sufficient soil moisture.

In particular, sunny skies allowed temperatures to rebound from October’s unseasonable cold, with readings during the week averaging 3 to 6°C above normal.

The warmer weather eased stress caused by recent bitter cold and allowed wheat to add vegetative growth in southern portions of the region.

The primary winter wheat oblasts in far southern Russia have received favourable autumn rainfall for establishment, and the week’s warmth and dryness further improved crop prospects.

However, soil moisture remained in short supply for winter wheat establishment from the southern Central District eastward into the northern Southern District and southern Volga, with many crops in these dry areas close to or already dormant.

Latest USDA GAIN reports

Ukraine

Ukraine’s grain exports are growing at moderate pace.  In the new marketing year 2014/15, by mid-October, Ukraine has exported over 6 million metric tons of wheat and over one million tons of barley.  Concurrently, the 2013/14 corn marketing year is approaching completion with over 18 million tons already exported.  Grain stocks are high due to a large production, but will likely deplete as the trade rallies on the expectation of another large corn harvest in 2014/15. Domestic grain prices at the start of the new season were lower than in the previous year and are expected to maintain low throughout the season.  Winter crops have been planted in favourable fall weather conditions.

Russia

Based on the officially reported data on grain harvest progress, FAS/Moscow increased its forecast of Russia’s total grain crop in MY 2014/15 by 2mmt to 101mmt.  The forecasted crop includes 57.5mmt of wheat, 19mmt of barley, 11.5mmt of corn, and almost 13mmt of other grains and pulses.  Given these crop volumes and the volatility of rouble exchange rate Russia may export 28mmt of grain, including 21mmt of wheat, 4mmt of barley, 2.5mmt of corn, and from 0.5 to 0.8mmt of other grains and pulses.

Kazakhstan

Kazakhstan’s 2014 grain harvest is lower than last year, with the FAS/Astana estimate for wheat production at 13.0mmt, down from last year’s 13.9mmt.  FAS/Astana estimates wheat exports in the 2014/15 marketing year at 6.0mmt, down 1.5mmt from last year but still far below the levels of 2011/12 of nearly 12mmt.  Delays in harvesting, and onset of rain and snow during the harvest resulted in lower production figures and high moisture content.  These factors are also expected to negatively impact Kazakhstan's exports.

Peas, beans and eggs in the Ukraine basket

Ukraine used to grow an assortment of legumes for human and animal feed but over the last decade the production of peas decreased by 40%.

Having looked at the economics of pea production it is easy to understand why; they made little money, are shallow rooted and a riskier crop to grow but there is no reason why productivity couldn't be improved.

Soybeans have replaced peas as a feed ingredient in recent years and are now produced in sufficient quantities to supply the domestic and export markets (just don’t be surprised if they turn out to be GM despite the law against growing GM crops in Ukraine).

The big problem with the current cropping balance in Ukraine is it relies heavily on a limited number of commodity crops - cereals, corn, sunflower, soyabeans - and while it’s OK to keep all your eggs in one basket you need to make sure you keep tight hold of that basket.

Growing commodity crops means you are completely reliant on the world market and as we saw in H13 the price can drop across all crops to below the cost of production.

Therefore it would be a wise agricultural policy that encourages and supports more crops in the mix rather than less which in addition to the environmental, operational and social benefits provides some buffer to the volatility of world markets.

Where I have seen peas and beans succeed in Ukraine is when they are grown on contract for a local animal feed mill or they are grown at a high quality to be sold locally for human consumption.

With the inevitable expansion of livestock sector domestic legumes would provide a valuable and economically viable source of proteins for emerging feed producers.

Adding value should lift the domestic price making them a more viable option than they seem to be at the moment.

Government policy should continue to support this.

Ukraine harvest & planting update

Ukraine harvest stands at 61.7mmt of grains and pulses from 14.3mha (97% excluding Crimea) with an average yield of 4.30mt/ha.

The highest grain yields occurred in western oblasts and reached 6.34mt/ha which gives you some idea of the long term potential.

To date Ukraine has harvested 25.2mmt of maize; 9.8mmt of sunflowers from 5.0mha (97%) with an average yield of 1.9mt/ha and 3.8mmt of soyabeans from 1.8mha (98%) with an average yield of 2.15mt/ha.

This week the President of Ukrainian Grain Association said that Ukraine could produce as much as 120mmt if it increased crop yields in line with the US and France and that ten years ago Ukraine produced 30mmt, today it’s more 60mmt.

He goes on to say that the crop yield is the integral indicator of development both the government and the agricultural sector.

I’d have to agree with that.

Russian harvest & planting update

Russia harvest currently stands at 109.9mmt of grains and pulses from 43.8mha (97.2%) with an average yield 2.51mt/ha.

To date Russia has harvested 62.2mmt of wheat from 23.9mha (97%) with an average yield of 2.61mt/ha; 21.2mmt of barley from 9.0mha (99%) with an average yield of 2.35mt/ha; 10.9mmt of corn from 2.4mha (91%) with an average yield of 4.56mt/ha; 8.6mmt of sunflowers from 6.1mha (90%) with an average yield of 1.40mt/ha; 1.4mmt of oilseed rape from 1.0mha (87%) with average yield of 1.39mt/ha; 2.5mmt of soybeans from 1.8mha (93%) with an average yield of 1.36mt/ha.

Russia has planted 16.8mha of winter grains or 101.6% of the planned.

Russia and Ukraine inflation to reach 9% and 20% respectively

Russia’s Head of the Ministry of Economic Development and Trade has said that 2014 inflation could reach 9% largely due to the Rouble declining 35-40%.

He further estimates inflation will reach 10% by the first quarter of 2015.

Meanwhile in Ukraine Oleg Ustenko from the Bleyzer Foundation said inflation for 2014 will exceed 20%.

He cites an outflow of foreign direct investments, decreasing of imports and exports and decreasing industrial production as the root causes.

If you told me those rates the other way around I would have found it more believable.

Agri-business news from Ukraine and Russia

USAID has presented a new eight-year programme to support agricultural development in Lviv, Kherson and Kharkiv oblasts with a budget of up to $6 million.  

It would be interesting to find out the rationale behind the choice of those three oblasts because it certainly looks politically motivated rather than technical.

An article by GRAIN (a non-profit organisation that works to support small scale farmers) pointed out that in Ukraine, small farmers operate on 16% of agricultural land, but provide 55% of agricultural output, including: 97% of potatoes, 97% of honey, 88% of vegetables, 83% of fruits and berries and 80% of milk.  

The article goes on to highlight the predicament of small farmers faced with an increasing mobilization of funds to support large scale agri-business at the detriment of the local population.  

A valid point and not one I would necessarily argue against but the question I have is who will fund agricultural development and food production if investment doesn't come from private finance?

Russian wheat prices rose slightly supported by the falling rouble and limited crops sales by farmers as they hold onto grains and sell sunflower seeds.

Moscow Times report that a shortage of available finance for farmers may affect the state's plans to quickly replace food imports with domestic production.

Agriculture Minister Nikolay Fyodorov reports that Russia no longer experiences pork shortages that emerged after the country imposed an embargo on imports.  It was eliminated by opening new markets and new countries and giving them permissions to import to Russia.  Does that sound credible given the time scale?

North Korea wants to rent 10,000 hectares in Russia's far-eastern Khabarovsk region and will farm it using its own workers and machinery to produce grain and vegetables.  Khabarovsk Agriculture Ministry has been quoted as saying the region is receptive to collaboration particularly in the construction of greenhouses and livestock farms.  So not a done deal yet.

The dispute over the CAP budget continues to gather momentum as twenty farm minister voiced their objection to the previous commission’s decision to activate the agricultural crisis reserve for next year to finance measures in response to the Russian food import ban.  

It seems they have already spent €344m of €433m put aside for 2015 and want to hang on to what’s left for next year’s unforeseen problems.

Life expectancy in Russia and Ukraine

The Russian Agriculture Ministry said they may reduce salt supplies from Ukraine but foresees no shortages.

It wouldn't do Russia or Ukraine any harm to cut down on salt and while they are at it alcohol, tobacco and sugar.

In the nineties life expectancy in Russia and Ukraine was similar to other countries under the control of the Soviet Union.

Since then life expectancy in Czech Republic, Hungary, Poland, Slovenia and the rest of Europe has increased while Russia and Ukraine departed from the trend and decreased.

Today one third of Ukrainians die prematurely before the age of 65 years, a rate much higher than in European countries.

A 2009 World Bank report said that about half of deaths before the age of 75 in Ukraine could be avoided through adequate prevention and treatment.

The biggest causes of premature mortality are linked to tobacco, alcohol and factors related to road safety and are largely modifiable and preventable.

The problem is further compounded by the lack of medical facilities which I can confirm first hand after having an emergency appendectomy several years back. 

I’ll spare you the detail but what is generally a routine procedure resulted in a near death experience, three separate operation’s, seven major incisions all taking place in a poorly equipped hospital in the middle of winter with intermittent heating and hot water. 

The highlight was my surgeon digging around in my wound without any anaesthetic looking to see if he had left anything behind that might have caused the complications.

He did refund my $600 though so it wasn't all bad.

The problem with consuming tobacco, alcohol and speeding and sometimes all three at the same time is we never believe it will happen to us.

It often requires government policy and action to bring in change to public attitudes and behaviour.

There have been some initiatives such as banning smoking in public places and the removal of alcohol sales from petrol stations, but as alcohol and tobacco consumption are amongst the highest in Europe and climbing it looks like much more needs to be done.

Ukraine harvest & planting update

Ukraine harvest stands at 60.7mmt of grains and pulses from 14.2mha (96% excluding Crimea) with an average yield of 4.28mt/ha (57mmt in 2013).

To date Ukraine has harvested 24.2mmt of maize from 4.1mha (89%) with an increasingly impressive average yield of 5.84mt/ha; 9.8mmt of sunflowers from 5.0mha (97%) with an average yield of 1.9mt/ha and 3.7mmt of soyabeans from 1.8mha (97%) with an average yield of 2.13mt/ha.

Ukraine has planted 7.5mha of winter grains (100% excluding Crimea) including 6.4mha wheat & triticale, 985kha barley and 149kha rye.

So far 6.3mha of winter grains have emerged with 83% in good to satisfactory condition, 17% poor, a further 1.0mha failed to emerge – that’s a poor emergence rate and slightly suspicious, I suspect more of that will be reported as emerged in the coming weeks.

Russian harvest & planting update

Russia harvest slowing down with 109mmt of grains and pulses from 43.6mha (96.9%) cut since the last report and an average yield of 2.50mt/ha.

This includes 61.7mmt of wheat from 23.8mha (97%) with an average yield of 2.59mt/ha; 21.1mmt of barley from 9.0mha (99%) with an average yield of 2.35mt/ha; 10.2mmt of corn from 2.2mha (85%) with an average yield of 4.53mt/ha; 8.4mmt of sunflowers from 5.9mha (88%) with an average yield of 1.41mt/ha; 1.4mmt of oilseed rape from 1.0mha (86%) with average yield of 1.42mt/ha. Anything not harvested will have shed seed and 2.4mmt of soybeans from 1.8mha (91%) with an average yield of 1.36mt/ha.

Russia has planted 16.6mha of winter grains or 100.4% of the planned, up 1.8mha on last year.

In view of the potential shortages in the larder the Deputy of the Agrarian Committee takes a relaxed view on GM saying a total ban is impossible.

To quote the other Marx “those are my principles and if you don’t like them, I have others”.

Belarus and Kazakhstan update

According to Belarus Deputy Minister of Ag, Russian rouble devaluation caused $160m loss in the agricultural industry of the country (8.6%) from August to October.

This won’t be helped by the Comrade next door banning meat imports but the Ministry of Agriculture and Food has a cunning plan to minimise losses by selling more cheese.

It is now the patriotic duty of every Belarussian citizen to eat more cheeses.

Not sure if the current policy not to export grains despite the large-scale harvest volumes is a good idea or not. 

Presumably the idea is based around adding value to grain and exporting milk and meat which is good if you can wait for the cash.

Kazakhstan harvest slightly upon forecasts at 18.0mmt of grains and pulses from 14.3mha (96%) with an average yield of 1.26mt/ha (20mmt in 2013).

I've just finished some research on Kazakhstan for a client, it's been a while since I was last there, call me masochistic but I kind of fancy going back.

Great place, great people but horse oesophagus does take some getting used to.

Latest USDA weather update for western FSU

Cold, mostly dry weather prevailed in major winter wheat areas, though somewhat milder conditions returned to northern - and western-most parts of the region.

A strong area of high pressure maintained sunny skies and below-normal temperatures (1-4°C below normal) in southern Russia.

Nighttime readings dropped below -5°C in key southern wheat oblasts, with weekly average temperatures less than 5°C indicating winter wheat was approaching or entering dormancy in the Southern and North Caucasus Districts in Russia.

Rain and snow (1-20 mm, liquid equivalent) were mostly confined to the North Caucasus District, though a secondary area of precipitation in northern portions of the Southern District provided some moisture for winter crops beset by an unfavourably dry autumn.

Meanwhile, near- to above-normal temperatures in Moldova, Ukraine, Belarus, and northern Russia eased crop stress brought on by the abrupt early-November cold.

Belarus and Kazakhstan update

Belarus maize harvest is almost finished with 105kha (98%) producing 789kmt giving an impressive (if not unbelievable) 7.51mt/ha.

If you want a flavour of how Belarus runs its agricultural policy then this article gives you an idea;

Belarus President lashes out at mismanagement in agricultural industry, demands 'iron discipline'

Kazakhstan harvest down this year with 17.5mmt from 14.0mha (93%) with anaverage yield of 1.25mt/ha (2013- 20.5mmt, 1.33mt/ha).

To put Kazakhstan in perspective, it is the sixth largest wheat producer in the world and in a good year can produce 27mmt of grain.

Ukraine harvest update

Ukraine harvested 58.9mmt of grains and pulses from 13.9mha (94% of the plan excluding Crimea) with an average yield of 4.22mt/ha (3.89mt/ha last year).

This includes 22.3mmt of maize from 3.9mha (83%) with an average yield of 5.73mt/ha;

9.6mmt of sunflower from 5.0mha (97%) with an average yield of 1.92mt/ha;

3.6mmt of soyabeans from 1.7mha (96%) with an average yield of 2.11mt/ha.

Ukraine has planted 7.4mha of winter grains (98%) including 6.3mha wheat & triticale, 941kha barley, 149kha rye.

Russian harvest update

Russia has harvested 108.3mmt of grains and pulses from 43.4mha (96.3%) with an average yield 2.50mt/ha.

This includes 61.6mmt of wheat from 23.6mha (97%) with an average yield of 2.60mt/ha;

barley - 21.0mmt from 8.9mha (99%) with an average yield of 2.35mt/ha;

corn - 10.0mmt from 2.2mha (84%) with an average yield of 4.53mt/ha;

sunflowers - 8.3mmt from 5.9mha (86%) with an average yield of 1.42mt/ha;

oilseed rape - 1.4mmt from 1.0mha (85%) with an average yield of 1.43mt/ha. I guess anything not harvested by now will have shed seed;

soyabeans - 2.3mmt from 1.7mha (87%) with an average yield of 1.36mt/ha.

Russian has all but finished planting with 16.4mha of winter grains (99.6% of planned area), up 1.89mha compared with the same date last year.

Why Ukraine crop condition might not be as bad as reported

The latest analysis on Ukraine crop condition is that devalued currency, lack of credit and economic uncertainty meant farmers have cut back on inputs leaving autumn cereals more susceptible to the forthcoming colder than average winter.

A pretty negative assessment perhaps but cutting back on inputs in the autumn might not necessarily be a bad thing.

Traditional (soviet) advice was to apply twenty odd kilograms of nitrogen to wheat in November to "give it a bit of a boost" ahead of the winter.

The effect was to make the crop greener and bigger but actually more susceptible to cold weather (something to do with plant cell size being larger and more likely to rupture on freezing). 

It’s now widely acknowledged that autumn applications of nitrogen fertiliser to all but the most backward of winter cereal crops has no impact on final yield so spending money in October is essentially a waste of time.

Cutting out autumn nitrogen not only saves money but it may actually improve winter survival rates.

As most Ukrainian farmers don’t apply residual herbicides because they believe it will damage the crop (it doesn't and they should) there are no chemicals to cut back on and no one applies autumn fungicides or insecticides.

You can’t really cut out seed otherwise you don’t have a crop and as pretty much all cereal seed is home saved most farmers would already have it in the shed ready to plant. 

Farmers might cut back on seed rate which as most crops are sown dense anyway might also be a good thing.

A lower seed rate saves costs (or creates some cash as you can sell off the surplus) and can increase yield if done right.

Diesel is the major autumn expense so cutting back on cultivations when cash is tight pretty much the only tangible cost saving to be made.

Many Ukrainian farmers cultivate the soil down to a fine, dry dust then wonder why the soil and seed get washed away in the first heavy rainfall or the seed germinates so slowly its super small going in to the winter.

Cutting back on cultivations will have conserved moisture, improved infiltration rates, reduced erosion and may have actually improved plant emergence and survival.

So it might not be as bad as analysts are reporting, sure the crops are small but any cutbacks to inputs might actually save money and improve the overall relative condition of the crop.

Latest USDA weather update for western FSU

Cold, mostly dry weather prevailed, with some rain and snow in the driest northern growing areas.

A strong area of high pressure brought sunny skies and below-normal temperatures (1-4°C below normal) to most winter crop areas of Ukraine and Russia.

Night time readings dropped below -10°C in central and northern Russia as well as the higher terrain of the North Caucasus District, accelerating winter crops into dormancy.

Somewhat milder conditions (night time lows of -5 to 0°C) in southern portions of Ukraine and Russia’s Southern District allowed winter wheat in these areas to remain vegetative.

Some light rain and wet snow (1-10 mm liquid equivalent) was reported in the driest winter wheat areas, including northern portions of the Southern District and southern-most portions of the Central District, though the past week’s cold likely minimized the moisture’s benefit since crops in these areas were approaching or entering dormancy.

Farther south, late-week rain and mountain snow (1-10 mm liquid equivalent) maintained favourable winter crop prospects in the North Caucasus and southern-most Southern District.

Across the remainder of Russia, lingering snow cover hindered or halted spring wheat harvesting in eastern portions of the country.

Russia harvest update

A cold front bringing wet weather and snow has slowed down harvest a little but then again it usually does this time of year so I wouldn't read too much into it.

Russia have currently harvested 107.3mmt of total grains and pulses in bunker weight from 42.9mha (95%) with an average yield of 2.50mt/ha.

Wheat 61.2mmt from 23.4mha (94%) with an average yield of 2.62mt/ha;

Barley 21.0mmt from 8.9mha (98%) with an average yield of 2.35mt/ha;

Corn 9.3mmt from 2.0mha (77%) with an average yield of 4.55mt/ha;

Sunflower 8.0mmt from 5.6mha (82%) with an average yield of 1.44mt/ha;

Oilseed rape 1.4mmt from 989kha (83%) with an average yield of 1.43mt/ha;

Soyabeans 2.2mmt from 1.6mha (83%) with an average yield of 1.36mt/ha.

Latest USDA weather update for western FSU

The coldest weather of the season settled over the region.

A strong cold front generated rain and wet snow over western and southern Russia as well as neighbouring portions of Ukraine and Belarus.

The moisture, which totalled more than 25 mm (liquid equivalent) in key winter wheat areas of southern Russia, was overall beneficial for vegetative winter grains and oilseeds.

However, temperatures behind the cold front averaged up to 5°C below normal, with the coldest conditions (night-time readings of -10°C or lower) in northern-most growing areas likely hastening winter crops into dormancy.

Even with some snow and cold, winter wheat in Russia’s Southern and North Caucasus Districts was not yet dormant.

In Ukraine, despite the changeable and unsettled weather, mostly dry conditions in north-central parts of the country facilitated corn and sunflower harvesting.

In contrast, winter wheat in southern Ukraine benefited from 10 to 25 mm (locally more) of rain.

Across the remainder of Russia, an early-season snowfall halted spring wheat harvesting in eastern portions of the country, while a sharp cold snap ended the growing season east of the Volga District.

Autumn planting nearly finished

The autumn planting season is nearing completion with reports that crops in some areas of eastern Russia are struggling in dry conditions.

Ukraine has planted 7.1mha of winter grains (94%) which is made up of 6.1mha of wheat and triticale, 845kha barley and 165kha rye.

Russian has planted 16.2mha of winter grains (98%), I’m still waiting for a breakdown of crops.

Meanwhile Kyrgyzstan has planted 54kha of winter grains (28%) including 50.6kha of wheat and 3.5kha of barley.

Russian harvest data confusion cleared up

Rosstat's Russian harvest figures in the previous posts were from the beginning of October which now makes perfect sense.  Thanks go to Damien from Inter-Courtage for clearing that up.

Must try harder.

Russia looks to India for milk

A team of experts from Russia are set to carry out inspections of milk processing units in India to explore the possibility of importing dairy products from them.

If successful exporting butter, cheese and milk powder could start by December.

This follows on from last month’s visit to Moscow by India’s commerce ministry who discussed resuming meat and dairy exports previously banned by Russia because of a foot and mouth outbreak years ago.

Good news for India perhaps but not what Russian domestic producers would want to hear as they looked to capitalise on the sanctions placed on US and EU supply’s.

Russian officials might be extolling the benefit sanctions will play in building local food production but they don’t seem to be doing anything to support it.

By looking to other countries to supply the immediate shortfall in supplies that sanctions have created they will be delaying further any investment in domestic production.

Ukraine harvest update

Ukraine has harvested 52.8mmt of grains and pulses from 13.0mha or 88% of the planned area (excluding Crimea) with an average total yield of 4.04mt/ha.

This is up on the same time last year when total yields were running at 3.68mt/ha.

Current figures breakdown as 16.4mmt of corn from 3.0mha (65%) with an average yield of 5.37mt/ha; 9.3mmt of sunflowers from 4.9mha (95%) with an average yield of 1.89mt/ha; 3.3mha soyabeans from 1.6mha (78%) with an average yield of 2.06mt/ha.

Harvest of buckwheat is now complete with 181kmt from 129kha giving an average yield of 1.39mt/ha.

Russia harvest update

According to Rosstat (the State Statistics Service) Russia has harvested 95.8mmt of grains.

This includes 41.6mmt of wheat with an average yield of 2.89mt/ha and 3.6mmt of corn with an average yield of 4.83mt/ha.

The thing is last week the Russian Min of Ag reported 60.9mmt of wheat with an average yield of 2.63mt/ha and 8.8mmt of corn with an average yield of 4.56mt/ha.

The difference in wheat could possibly be explained as winter and spring crop (unlikely) but corn?

I'm looking forward to the Min of Ags next report which might clear up the confusion.

Russia asking farmers to increase production

Russia is asking and presumably expecting farmers to increase domestic production to fill the gap left by banning imports from the US and EU.

However boosting output requires investment and no-one knows how long the import ban will be in place.

It is supposed to be for one year but as it was brought in overnight it equally could be lifted at the stroke of a pen.

This is not a situation that will encourage major investment.

What will be required is for tangible action to be put in place to tackle issues such as high interest rates and problematic regulations before significant investments will be made.

Then Russia might see businesses looking to take advantage of the situation.

Aphids in Ukraine and Russian winter wheat

Current weather conditions in Ukraine and Russia has been dry and unseasonably warm which will favour cold blooded aphids.

In warm weather aphids migrate into winter cereal crops and reproduce.

The issue with aphids this time of year is not injury from direct feeding but as they feed they introduce plant viruses much in the same way intravenous drug users do when sharing a needle.

They transmit barley yellow dwarf luteovirus (BYDV) and very low populations, which may go unnoticed, can cause economic damage.

The two aphids in question are Grain Aphid (sitobion avenae) and Bird Cherry-Oat Aphid (rhopalosiphum padi) both of which I have seen in Ukraine and Russian.

As yet have never met a local agronomist who knows what they are or could identify one.

These two aphids and the problem they cause have been well documented in Western Europe but I haven't seen any research data or information on control or thresholds in Ukraine or Russia.

I'm not saying it’s not there I just haven’t seen it or have been shown anything by local agronomists.

In the UK losses up to 2.5mt/ha have been recorded, losses in Ukraine and Russia might be low but they could be significant.

Control is based around imidacloprid seed treatment and autumn applications of pyrethroids, neither of which are currently done so if they are causing a problem they are not being controlled.

Ukraine wheat plantings may exceed the plan

The Ukraine Ministry of Agrarian Policy has declared winter wheat plantings may exceed the

original plan of 6.2mha due to favourable weather conditions and a good situation on the world market.

Before my kids came along I used to read books, one that has stayed in my memory and I occasionally quote from is Jeremy Paxman’s The Political Animal.

Paxman is an English journalist who worked for the BBC and his infamous interview when he asked the Home Secretary the same question 12 times in an unsuccessful attempt to get a straight answer gives you an inkling of what he’s like.

In his book he explains how he dislikes politicians because they would sell their grandmother to gain votes or parade their wife and kids in front of the press in a display of family unity the morning after they had been caught with their secretary if it meant it would save their job.

With that in mind let’s take another look at that statement from the Minister of Agriculture.

The Minister has declared that winter wheat plantings may exceed the original plan. 

That they might well do but what plan?  Prediction or forecast might be a better word although I think he may actually believe it’s a plan.

One of the biggest challenges Ukraine has is to shake off years of command led thinking which you can see in the steady flow of announcements and declarations about targets, plans and outputs.

The government pushes farms to follow policy but provides little incentive to do so, it uses threat that if you don’t do what we ask then we will cause problems elsewhere in your business.

For the last five or so years I have been told by local administrators that I must immediately farm livestock as it has been decided by central government and can I supply a business plan also immediately for the new dairy unit or pig farm.

(The trick here is to agree then do nothing, several months will go by until you’re called in to the office to be told off again, you apologies, say you’re working on it then do nothing, by the time it comes around again he’ll have been replaced and the whole cycle can start again.)

Favourable weather conditions? 

It’s been dry which means planting has progressed but that dryness needs some wetness to get crops up and ready for the winter.  Just because it’s dry and we are all planted up doesn't necessarily follow we would continue to plant more.  Generally that’s not how a farm works; we have a plan based on a rotation, machinery output, seeds and chems purchased, diesel ordered, budgets, cash flows, holidays and so on.

A good situation on the world market?

That’s not how I read the market; global grain surplus, multi-year low prices, input costs up.  My guess is the sensible route would be to hold additional winter plantings to see how the market develops by the spring and adapt accordingly.

In his book Paxman discovered that 60% of British Prime Ministers had lost one or both parents at a young age compared to the national average of 1%.

 

Not sure what that says about politicians but it screams something.

You can watch that Paxman interview here.

Latest USDA weather update for eastern FSU

A mix of rain and snow (10-45 mm liquid equivalent) hampered spring wheat harvesting in northern Kazakhstan, as well as the Urals and Siberia Districts in Russia.

Early- to mid-week showers slowed fieldwork throughout the region.

At the end of the week, however, cold air accompanied another surge of moisture, causing the rain to change to snow in Russia and extreme northern Kazakhstan.

Accumulating snow was likely in these areas, halting spring wheat harvesting.

Temperatures averaged about 2 to 6°C below normal in Russia and extreme northern Kazakhstan.

Farther south, dry weather returned to Kyrgyzstan, Tajikistan, and eastern Uzbekistan, allowing cotton harvesting to accelerate in the wake of recent rain.

Latest USDA weather update for western FSU

In Ukraine and western Russia, unseasonably warm, showery weather (5-25 mm or more) favoured early winter wheat and barley development, aiding germination and emergence.

The showers likely slowed local fieldwork, including summer crop harvesting and additional winter grain planting.

The rain was overall beneficial, however, providing a welcome boost in topsoil moisture which will help with winter grain establishment.

Elsewhere in the region, mostly dry, unseasonably warm weather favoured summer crop harvesting in Belarus.

Temperatures in Belarus, Ukraine, and western Russia averaged about 3 to 6°C above normal, helping spur winter grain development.

Russia harvest update

Russia has harvested 106.2mmt of total grains and pulses in bunker weight from 42.4mha (94%) with an average yield of 2.50mt/ha.

This compares favourably with 2013 production figures (88.6mmt, 2.21mt/ha) and breaks down as follows:

Wheat 60.9mmt from 23.1mha (94%) with an average yield of 2.63mt/ha;

Barley 20.9mmt from 8.9mha (97%) with an average yield of 2.36mt/ha;

Corn 8.8mmt from 1.9mha (73%) with an average yield of 4.56mt/ha;

Sunflower 7.7mmt from 5.3mha (78%) with an average yield of 1.45mt/ha;

Oilseed rape 1.4mmt from 975kha (82%) with an average yield of 1.44mt/ha;

Soyabeans 1.9mmt from 1.4mha (72%) with an average yield of 1.36mt/ha.

Ukrainian Agrarian Confederation corn harvest estimate

Ukraine’s latest corn harvest update shows 14.7mmt of crop from 2.8mha (60%) with an average yield of 5.28mt/ha.

The Ukrainian Agrarian Confederation has estimated final harvest volumes will reach 27.0mmt.

That will require the yield to improve from the current average of 5.28mt/ha to 5.78mt/ha, an increase of 0.50mt/ha or 9%.

Except what is actually required is the remaining crop to be harvested (1.88mha) will need to average 6.54mt/ha.

Personally I don’t see that happening, in my experience yields tend to fall as you move on to the later planted crops and weather starts to have a greater impact on harvesting operations.

Plus there is always a percentage of crop that doesn't get harvested until the spring.

I would suggest 27.0mmt is a great aspiration but in reality and given some consideration I would say it’s unlikely.

Back to the future

One of my earliest memories of politics in agriculture was 1984 and the introduction of EU milk quotas to drain milk lakes that had been created by previous policies aimed at increasing output.

At the time I was working in my first full time job on a small farm that had gone out of milking cows in the seventies during the previous effort to reduce over production, known as the Golden Handshake.

The farm still had each cows name written on chalk boards above individual stalls, even after fifteen years the boss hadn't been able to take them down such was the emotional attachment to his animals.

Golden handshakes and quotas were and still are blunt instruments used by politicians determined to engineer simple solutions to complex agricultural issues and as today's dairy farmers complain that milk sells for less than water you’d be forgiven for thinking they haven’t work.

I'm not saying it’s wrong to have agricultural policies that encourage safe, sustainable, viable farming, far from it, food production is such a fundamental important business it would be wrong to leave it to the free market.

The problem seems to lie in the disconnect between what is actually possible on a farm and the time frame and what politicians and policy advisor's believe is possible and want to happen.

I clearly remember when quotas were introduced seeing angry, emotional dairy farmers on TV saying it wasn't possible to switch cows on and off like machines and having to send productive in calf animals to slaughter.

Today a familiar story but at the other end of the production continuum is coming out of Russia with calls to ramp up production to cover the shortfall in food supplies caused by the ban on EU and US imports.

This had led to a number of Russian ministers making unrealistic promises about replacing banned products by increasing output with no reference to how that was actually going to be achieved.

As one Russian cattle farmer recently said, “There were around 4 million beef cows in 1991, now there's only 1.5 million, increasing meat production cannot happen overnight, however badly the politicians want it…it's animals, not machines."

Echoes across thirty years from British farmers in 1984 to Russian farmers today.

Russian harvest update

Russia has harvested 104.1mmt of grains and pulses from 41.7mha or 92% of the planned area with an average total yield of 2.50mt/ha.

Last year yield was 2.21mt/ha so a slight improvement.

This breaks down as 60.4mmt of wheat from 22.9mha (93%) with an average yield of 2.64mt/ha; 20.8mmt of barley from 8.8mha (97%) with an average yield of 2.36mt/ha; 7.6mmt of corn from 1.7mha (62%) with an average yield of 4.59mt/ha; 7.2mmt of sunflowers from 4.9mha (72%) with an average yield of 1.47mt/ha; and 1.6mmt of soyabeans from 1.2mha (61%) with an average yield of 1.35mt/ha.

Ukraine harvest update

How time flies, one minute I was talking about the start of harvest then the next minute we are
looking at the finishing stages.

Ukraine has harvested 48.2mmt of grains and pulses from 12.3mha or 83% of the planned area giving an average total yield of 3.91mt/ha.

This is up on the same time last year when total yields were running at 3.54mt/ha.

Current figures breakdown as 11.8mmt of corn from 2.3mha (50%) with an average yield of 5.10mt/ha; 8.8mmt of sunflowers from 4.67mha (91%) with an average yield of 1.89mt/ha; 2.9mha soyabeans from 1.38mha (77%) with an average yield of 2.09mt/ha.