Latest USDA weather update for western FSU

Unseasonably warm weather prevailed across the region, with rain falling in western and southern growing areas.

Temperatures for the week averaged 3 to 6°C above normal over most major winter wheat areas of Russia and Ukraine, further eroding the region’s snow pack (now confined to the Central and Volga Districts in Russia) and encouraging early greening of winter wheat in southern parts of Russia and Ukraine. 

In addition, light to moderate rain (2-20 mm) accompanied the warmth over western and southern portions of the region, maintaining favourable moisture reserves for spring growth.

However, the Southern District (in particular, the Rostov Oblast) remained unfavourably dry (less than 50 percent of normal over the past 30 days), and rain will be needed over the upcoming weeks to ensure adequate soil moisture for spring growth.

4KKM Crop Tour™ Twitter account

We now have a dedicated members only 4KKM Crop Tour™ Twitter account.

We will be posting pictures, video and running commentary on what we see as we progress through the tour.

It will be an opportunity to ask questions or seek clarification on what we are looking at.

It's the next best thing to being there yourself, in fact if you stay awake for twenty hours a day and sleep on a collapsed mattress next to a boiling pot of cabbage you might just believe you are.

This is a protected site which means it will only be visible to subscribers, drop me a line if you wish gain access and I'll send you details of how to pay.

@AgronomyTour

4KKM Crop Tour™ update

The crop tour is starting to swing in to action this week so I told the kids to start packing their toy and prepare to leave our current home.

I say toy, the kids have loads of toys but if I'm carrying them from Bordeaux to London to Moscow and beyond then we’ll have to leave the rest behind which might be harsh but I think is an important lesson. 

I did tell them that if more people signed up to the tour then we might be able to afford the excess baggage on more toys. 

So those of you who said, “nah, we’ll ‘borrow’ a copy of the report” from someone who has signed up; you are directly responsible for my two year old having to decide which one of her favourite cuddly toys she can take with her and which get left behind to die.

Although the report will be useful, personally I think the real benefit will be following us on our Members Only Twitter account as we post photographs, video, commentary and answer questions as it happens in real time.

I set up a Paypal account so members of the tour could easily, seamlessly and safely send me their contribution in a variety of currencies.

 

I think it has worked well from that perspective but what Pay-not-my-pal conveniently failed to tell me was that as a new seller they would hold on to the funds for 21 days just to make sure I'm not an international drug smuggler laundering funds or a Russian oligarch looking to buy a football team.

Actually what they said is funds will be held for 21 days from the first transaction for the next 60 days.  Got that?  Me neither.

Over the last week I have had a steady communication with Pay-not-my-pal which has been like talking to a twelve year old; unless you ask the exact right question they won’t tell you what it is you actually need to hear but as you have never used the service before you don’t know what it is you need to hear.

And they have dodged my question about can charge them interest.

So, move over Gold Car, you are still the worst car hire company that has ever existed but your position as my number one least favourite company has been lost to Paypal, the company that charges you a hefty fee not to transact your funds.

Technology is brilliant except when it isn't

Scientists have developed 5G technology that allows huge amounts of data to be downloaded in seconds.

The example they give is it’s possible to download a feature length film in a matter of seconds.

That’s great and all, but if your connection to the internet is along a piece of string strung from a telegraph pole down a winding and windy road then it’s still going to be slower than a banker admitting to tax evasion.

Surely it’s better to get access to the internet up and running for all before we make it jump through hoops.

As my Dad used to say “technology is great son, you can phone all around the world but unless someone is there at the end to pick up, it counts for nowt”.

Latest USDA weather update for western FSU

Mild, mostly dry weather sustained favourable overwintering conditions for wheat and barley, though southern growing areas remained devoid of snow cover despite the arrival of colder air.

High pressure provided sunny skies along with near- to above-normal temperatures (locally up to 5°C above normal) from Belarus and northern Ukraine into northern Russia, with winter wheat remaining dormant under a shallow snow pack (2-10 cm) in Ukraine and more than 25 cm of snow in Russia.

Farther south, early-week rain (1-10 mm) in Russia’s Southern and North Caucasus Districts sustained favourable soil moisture reserves for spring growth, but crops remained devoid of snow cover from central Ukraine into southern Russia.

Despite the arrival of somewhat chillier air (locally more than 3°C below normal) in the Southern District, night-time lows of -15°C or greater did not pose a risk for freeze damage or winter kill.

Ukraine grains influence world market price

According to latest USDA estimates world grain production for 2014/15 MY will total 1.98bmt

including 63.8mmt or 3.1% from Ukraine.

Now the interesting thing here is Ukraine produces more than is required for domestic consumption so much so that its share of the world market of grains is quite significant.

According to APK-Inform estimates Ukraine could in the current marketing year’s export in excess of 34mmt or 54% of its production or 10.1% of world grain exports.

It’s this last figure that demonstrates the scale of influence Ukraine grain production has on the world market and bearing in mind this is very likely to be down for H15 it might just bring some welcome relief to grain farmers the world over.

Belarus milk yield up; more bad news for EU dairy farmers?

Belarus has said the current modernisation of their dairy industry will allow 6.9mmt of milk to be produced in 2015, up 10% on the previous year.

The Belarusian Minister of Agriculture reported that a total of 300 dairy farms were built and 1,063 were remodelled as part of the national program for developing the dairy industry since 2010.

Now this is a Minister of Agriculture of a totalitarian agricultural state that has a former collective farm director at its head, who likes to take a direct and personal role in how farming is conducted so I would treat these figures with a degree of caution.

But Belarus has been upgrading its agriculture for a number of years now and the president does take direct action in that process so it’s very likely that milk output (if not efficiency) will increase and it will find a home in Russia.

If you listen to pretty much anyone associated with EU dairy industry over the last six months it will be catastrophic as Russia has been such a significant market for dairy products that the food sanctions has been the root cause of all the low prices.

So Belarus upping milk output and taking a larger share of the Russia dairy market which it will do as a member of the Customs Union is a problem for western dairy farmers?

Not necessarily.

Bringing in sanctions has had an impact and some sectors felt it more than others and it may well have been the final nail in a number of coffins but a lot of the shouting is just part of the process to leverage compensation from the EU emergency fund.

Isn't the real long term problem of low milk prices oversupply, that there is too much milk about for the domestic and global market?

EU milk quotas are about to be dropped so I guess we’ll find out soon enough.

USDA raises stock estimates and prices fall

Yesterday the USDA raised its estimate of world wheat stockpiles by 0.9% to 197.85mmt.

Both Chicago wheat and corn prices fell after the report despite concerns about shipments from Ukraine and Russia.

Might be a bit hasty as what I'm hearing is the Russian ministry of agriculture are considering increasing the export tax rate which came in to force at the beginning of February and extending the length of time it will be in place.

Meanwhile Ukraine’s ministry of agriculture has started making much stronger comments about taking action if grain exports exceed limits previously agreed during a period of much softer and inclusive announcements.

The Russian story is at the moment a rumour but is entirely possible; the Ukraine situation is highly probable as traders will look to take advantage of the devaluation in the country's hryvnia currency regardless of any MoU.

To date Ukraine has exported 22mmt of grain, including 8.7mmt of wheat, 9.2mmt of maize and 3.8mmt of barley.

Russian winter crops in great condition, possibly

Earlier this week the Russian Ministry of Agriculture reported that 21% of the winter crop is estimated as poor.

The spokesperson reminded us that Russia had planted 16.8mha of winter crops for harvest 2015 so that makes 3.5mha in what they describe as "poor and thinned condition or without crop sprouts".

As a measurement “poor and thinned” is subjective and tells me jack all about the condition and I have no idea what “without sprouts” means; failed to emerge, no tillers; no main stem, what?

As a minimum I would like to know the plant population and growth stage particularly the number of leaves and tillers (although Russian wheat doesn't tiller that much) to get some objective measurement of crop condition. 

Ideally also the seed-rate and thousand grain weight would enable me to base reference how much seed was planted and compare that to what had emerged and established thus giving me some insight in to what had happened to the crop since planting.

I mean if the crop was planted thin then it will be thin so that's no indication there has been a problem.

Additional information like the green area index (how much green material there is), the incidence and severity of any pest or disease present, damaged or dead leaves, weed type, growth stage and type and a general overview looking at the colour, root growth, seedbed and soil conditions would be extremely helpful.

I've worked with a lot of Russian agronomists and great chaps they are too, but not one could calculate the plant population or identify the growth stage when asked.  Not their fault, that sort of information was neither required nor taught in former times when the main goal was to put stuff on to a crop and hit production quota.

So the information from the ministry is subjective at best and bearing in mind the condition of the fields right now – the attached picture is a wheat field in Kursk yesterday – how on earth can anyone make any assessment at all?

On the one square meter out of 16mha we looked at yesterday, we can confidently report that 100% of winter crops look boss.

Friday’s agri-business news round-up (or should that be glyphosate?)

The Russian trade ban dominated discussions in the EU this week with the commission urging

member states to show “solidarity” and to refrain from arranging their own talks in order to get around their ban for their own products.

The EU Agricultural Commissioner Phil "the Hulk" Hogan admitted that EU law did not prevent member states from establishing bilateral trade agreements but that a common EU approach would be more beneficial than one-off deals.

Which depends on where you are in the supply chain Phil; I just don’t see a Hungarian dairy farmer giving a toss about macro politics nor the marginal MP trying to secure the rural vote ahead of a general election.

The FAO have opened an office in Moscow to bolster cooperation with Russia in agricultural and food security-related matters.

I'm only surprised by this because I assumed they would already have an office in Russia although the inauguration of the new office is scheduled for the end of the year so don’t expect too much too soon.

Seven out of nine Belarusian meat processing companies have resumed supplies of beef to Russia previously banned over African swine fever virus.

Showing my ignorance here but can cows contract swine fever?

According to the office of a German parliament member the armed conflict in Ukraine is being used as a smokescreen for the seizure of farmland by foreign firms funded by the World Bank and EBRD.  The other story doing the rounds is that Ukraine will be forced to grow genetically modified crops in return for foreign aid hand-outs.

Personally I don’t buy either of these rumours for a number of reasons including anyone can secure land in Ukraine, you don’t need a war to hide behind and growing GM is one thing but who will buy it?  Having said that these rumours have been around since last year and they do keep cropping up so something’s afoot.

Kazakhstan now and according to the analytical service Ranking.kz, the volume of agricultural investments in the country is up 17% on 2013.

It may be that while Ukraine is on temporary hold as an agri-investment destination then Kazakhstan reaps the benefit, plenty of potential out there...if it rains.

Still in Kazakhstan and the Minister of Agriculture has proposed dropping grain export subsidies ($81 million) in favour of spending on supporting farmers, developing seed production and purchasing equipment.  Seems sensible.

In the same week Kazakhstan proposes dropping export subsidies, Russia imposed their export tax priced at no less than €35/mt and current rumours are the Ministry is considering increasing the rate and extending the term which has not gone down well at all.

Unlike vodka which has seen the price slashed in Russia.

My topical advice this week then is don’t booze if you are considering signing an extension to a trade tariff, you might do something rash.

Have a good weekend.

FAO report on the agriculture sector in Ukraine's conflict zone

Last week the FAO and Ukraine’s Ministry of Agriculture completed a joint rapid needs assessment (RNA) of the agriculture sector affected by the conflict in the east of the country.

This is a précis of their findings in their words.

• Up to 30% of the winter wheat was lost in June/July due to conflict.
• Lot of people could not plant spring crops (barley, corn) due to the ongoing shelling and fighting and nearly 50% of the autumn crop could not planted in some areas.
• Spring sunflower that could not be harvested matured with seeds falling on the field affecting land for subsequent cropping season - meanwhile lower production affecting the raw material supply to oil industries.
• Fields were also burnt due to shelling affecting harvest.
• Farmers are worried about winter wheat (major crop) due to lack of sufficient fertilizer, which is needed after snow starts melting away.
• Displaced families that have returned back need to restore their agriculture, but lack capital to purchase the inputs (seed, fertilizer, animal feed, etc).
• Biggest poultry holding, pig farms and cropping land close to the borderline on both sides have been severely damaged.
• Many livestock heads were either killed or taken away by the rebels during the fight (e.g. out of 53,000 cows in the Donbas region, 10,000 heads have been reported killed) and livestock shelters have been damaged or destroyed.
• Farmers were forced to slaughter many cattle and pigs due to fear of losing them or lack of animal feed.
• Fuel and fertilizer prices have gone up.
• Trade with Russia has disrupted, so is the opportunity to sell the produce – enterprises are facing difficulty to transport the produce to other areas due to increasing costs and the need to detour.
• Devaluation of UAH against USD is exacerbating the situation as the input prices have gone up, but the prices of agriculture produce have remained unchanged.
• Access to credit is a major concern - farmers face difficulty accessing credit from the banks for restoring agriculture.
• The enterprises are already losing and are therefore face difficulty in paying the land rent to the small shareholders.
• Some lands are still mined and trenches are dug – these lands cannot be planted, especially for those whose lands are stretched along the ‘borderline’ and fall in highly insecured zone (UXOs are littering around).
• Orchards need to be made ready for spring with fertilizer, herbicide and fungicide, labour charges and rent.
• Machineries such as cultivator, seeder, harvester, tractors and accessories were lost or damaged by shelling, or taken away.
• Families living in the villages within 40-60 km of the ‘borderline’ in Luhansk have lost many livestock (an example from a nearby village where 100 cows were killed out of a total stock of 120 in Northern Luhansk).
• Some families need money to repair house damages, which limits their capability to purchase crop and livestock inputs.
• Small families supported by the farming enterprises with inputs and machineries may not get support the next season due to problems faced by the these enterprises.
• Supplementary feed and crop input packages to sustain their subsistence form of farming is an important priority.

Agri-news from Russia (Masha the wonder cow)

Breeders in southern Russian have developed a sanction busting “anti-crisis cow” that “doesn't need to be fed in the winter and can survive periods of not eating at all.”

Brilliant, a bit like camalina which was doing the rounds in the FSU a few years back as the miracle crop that could be grown without any inputs apart from seed…and some diesel…and probably a herbicide…and some P & K…and while we’re at it better bung in an insecticide.

Restrictions on beef imports from Belarus to Russia imposed for quarantine reasons are to be lifted.

To be honest I lose track of all these restrictions and sanctions, I think they may have been imposed in December last year but I could equally be wrong.  Anyhow fresh Belarussian beef will be back on the menu in Moscow any minute now.

Which reminds me of the time I found myself eating fresh beef in a Belarussian slaughterhouse except I didn't know it was a slaughter house until we got up from the table pie-eyed on vodka for a tour of the facility.

Late at night it was too and I’ll tell you this for nothing, being in a cold, dark Belarussian abattoir late at night in the middle of winter looking at piles of animal body parts sobers you up pretty darn quickly.

The Russian tax on wheat exports which was first announced back in December came in to force at the weekend.

If I've read this right it’s 15% of the customs value of the consignment plus €7.5 but not less than €35/mt which is massive and I assume all but stops exports of wheat from Russia.

The reason given was to reduce the attractiveness of Russian grain sales to foreign markets and stabilise prices of flour and bread in the country which is always a political hot potato.

In the same week it’s been reported that the price of vodka is to be reduced, surely this isn't just a case of “bread and circus”?

Just how bad is the dry weather for Russian wheat?

Dry weather in Russia has left wheat vulnerable to damage this winter, said Amy Reynolds, a senior

economist at the International Grains Council in London.

The key phrase here is “in London”, relying on satellite data and remote weather reports doesn't always capture the full agronomic picture.

Ms Reynolds isn't alone in her pessimistic agronomy report; the internet is full of imminent catastrophe for the Russian wheat harvest and Russian doom and gloom in general.

I suspect some of this stems from the anti-Russian rhetoric pushed into the news by the spin doctors as part of the broader effort to put pressure on Russia to amend its current foreign policy in Ukraine.

But looking at this from an agronomist position and I'm less pessimistic on RU H15 forecast.

True winter crops went in to the ground in dry conditions, struggled to develop and intermittent snow cover and cold will have increased the chances of winter kill.

But that dry weather will have encouraged roots to go looking for water and grown deeper in to the soil profile in the autumn which will help later in the season when it really does get dry.

While reports are saying things like rainfall is half of normal whatever normal is, what that actually means is the soil is still wet – OK it’s frozen now but any precipitation be it rain or snow will saturate the soil come the thaw.

And if we do look at the satellite data such as the US Air Force Weather Agency it currently shows that out of the twenty oblasts they monitor in western and central Russia, currently 14 are above or well above average precipitation with the balance of six oblast not that far below normal.

Doesn't sound too bad to me but the the only way to be really sure will be to go and have a look yourself.

I’ll be doing just that in April.

Latest USDA weather update for western FSU

Rain and snow over Ukraine and western Russia boosted soil moisture reserves for dormant winter crops, while warm, wet weather kept southern wheat areas devoid of snow cover.

Widespread rain and snow (5-25 mm liquid equivalent, locally more) across Ukraine and central Russia further improved moisture reserves for dormant winter wheat following a pronounced autumn drought.

Snow fell from north-central Ukraine into central Russia, with depths averaging 5 to 15 cm in northern Ukraine to more than 25 cm over much of western and central Russia.

The snow pack afforded sufficient protection from potential winter kill in the southern Volga District, where night time readings dipped below -20°C.

In contrast, continuing warmth (highs of 10-15°C) in south western Russia along with variable showers (3-25 mm) kept winter wheat devoid of a protective snow pack and continued to reduce crop cold hardiness.

However, the warmth minimized the risk for winter kill during the period.

Spring 2015 Ukraine and Russia Crop Tour

Last year I completed a 2,000km crop tour of Russia which was followed in real time on Twitter with many people telling me they found it useful.

This year I am planning a 4,000km, ten day crop tour through Ukraine and Russia to assess crops as they come out of the winter.

The aim is to achieve a clear picture of the condition and potential capability of overwintered crops as spring growth commences.

The provisional planned route will cover regions that make significant contributions towards the national yield and the export potential of both countries.

The tour team have plenty of in country experience and will give a clear, balanced and independent opinion on the condition and potential at a key stage of the production cycle.

We will use a number of techniques including;

• crop transects;
• score cards and overall crop scores;
• samples of key yield indicators including plant population, green area index, growth stage, winterkill, pest and disease levels, abiotic issues;
• visit barometer farms to investigate crop condition in more detail;
•  interviews with current farm mangers and agronomists to council opinion on crop condition and the season ahead.

But we need sponsorship to make the project viable, can you help?

Contributors to the tour will receive an emailed end of tour report summarising all the information recorded including comments, opinion and observation with photographs and access to videos.

We are considering using a drone to get some aerial pictures if authorities allow and if safe to do so particularly around any areas of conflict.  If this is not possible we will use a Go Pro pole mounted camera to record useful images from an elevated perspective as well as intermediate and close up pictures.

We are considering a dedicated member only Twitter account that will provide an ongoing update and dialogue during the tour.

For all this valuable insight all we are asking is a minimum contribution of £75, €100 or $115 towards costs.

That’s a minimum contribution so feel free to pledge more.

At this stage all I am asking for is an indication of willingness to contribute with no commitment, if you think this would be useful to you and there is sufficient interest to cover costs then we will proceed to the next stage of planning and commitment.

Please register your interest or send any questions to me at agronomy.ukraine@yahoo.co.uk or forward this page to a colleague who might be interested.

Thanks.

Latest USDA weather update for western FSU

Unseasonable warmth developed over western and southern portions of the region, while eastern-most crop areas remained cold and snow covered.

Across key wheat areas of Ukraine as well as western and southern Russia, warmer weather (3-7°C above normal) reduced the region’s protective snow cover but minimized the risk for freeze damage to dormant winter wheat.

In addition, daytime highs greater than 10°C across south western Russia reduced winter wheat cold hardiness and may have encouraged some early greening.

In contrast, near to below normal temperatures prevailed across central Russia, keeping dormant winter crops encased in snow.

Precipitation totalled 10 to locally more than 25 mm (liquid equivalent) across central and north western crop areas, with much of the precipitation falling as rain.

The weeks agri-news from Russia and Ukraine

Russia approved a draft law which prohibits the cultivation and breeding of genetically modified plants and animals, except for the use for scientific research and prohibits the import of GM products including feed and raw materials.

Prime Minister Dmitry Medvedev said Russia does not intend to bring GMO production into the domestic market and a senior official from the minister of agriculture provided a balanced view by saying we don’t want to poison our citizens.

The official position is they are trying to improve state regulation of genetic engineering although how this much this is influenced by the main owners of the $50 billion GM global seeds market being American is anyone’s guess.

Reports this week that EU pig meat exports to Russia could resume might be a little premature.

They stemmed from a meeting at the International Green Week in Berlin between the EU Commission, several European countries and the Russian veterinary authority Rosselkhoznado. 

With no trade issues to talk about what else were they going to discuss?

Russian government advised growers that state support would be withdrawn from producers who do not sell grain in an attempt to encourage trade during a period of low domestic prices.

Some of this low priced trade will be purchased by the state who created the current low prices by restricting exports.  Nice.

Bulgaria and Macedonia joined the growing list of countries along with the UK dairy group First Milk in blaming a large part of their agricultural problems on the Russian food embargo. 

Russia’s self-imposed food import ban has had an impact but has only been in place for five months while the root of many of the sectors financial issues can traced back years.

China are demanding Ukraine refund $3 billion for grain order placed in 2012 which was not delivered.

Ukraine said they won’t be able to supply the grain because they don’t have it citing a shortage of combiners, adjusters (?), mechanics and farm-machinery operators required to grow the crop as they are all now in the army.

There is more to this than a shortage of technical staff but it does highlight a problem with the availability of working age men for the planting campaign as they are conscripted or are in hiding trying to dodge conscription.

Ukraine Minister of Agriculture, Oleksiy Pavlenko, met with EU Ag Commissioner, Phil Hogan to discuss increased quotas for Ukrainian agricultural commodities and the possible their cancellation.  

It's unlikely this would happen any time soon but it would certainly fit with the EU Ukraine policy of support.  If quotas were cancelled that would make Ukraine grain very competitive in the EU market.

Don’t say I didn't warn you.

APK’s Rodion Rybchinskiy said statements on winter seedings condition in mid-January are speculative and it’s impossible to provide clear outlook until February. 

I agree except I would suggest March and probably the end of March is the earliest we can realistically get a good look at post-winter crop condition in most FSU regions.

So here's my mid-January statement; I'm hearing reports from parts of Russia with little snow cover of brown and dead wheat fields.

I wouldn't read too much in to it at this stage but it looks like we might see elevated levels of winter kill in exposed regions.

Are supermarkets any good?

When I used to lecturer at an agricultural college many of my students would spend evenings, weekends and holidays doing farm work in order to secure extra beer tokens.

So it was noticeable that when a large Tesco’s opened nearby how many of them migrated to stacking shelves instead of getting dirty down on the farm.

When I asked them why, the answer was always the same; easy money.

It was physically easy, no one hassled them, they could come and go as the pleased, they didn't get wet, cold, filthy dirty and the pay was good.

The work was hardly satisfying and was never going to be a long term career option because it didn't involve tractors but it was very much in contrast to the jobs they had been used to doing so much that they thought it was an absolute breeze.

Now we all know that ag students are a breed apart and thrive in a working environment that would make lesser mortals run home to mummy in tears but even so does this mean that the big supermarkets are inefficient? 

I get the feeling that supermarkets set the bar quite low when expecting output from their shelf-stacker's and if this is the case does it permeate through the rest of the business.

Are farmers being penalised for inefficiencies in supermarkets?

Latest USDA weather update for western FSU

Near to above normal temperatures and precipitation maintained good conditions for dormant winter grains over much of the region.

From eastern Ukraine into central Russia, 50 to 70mm of precipitation (much of which fell as snow) improved soil moisture reserves in areas impacted by autumn drought.

In addition, crops were protected from bitter cold (-20°C or lower) at the end of December by a moderate to deep snowpack, reducing the risk for winterkill.

However, snow cover was shallow and patchy in north-central Ukraine, leaving crops exposed to the elements.

In addition, many of the wheat areas of central and northern Ukraine remained unfavourably dry, exacerbating soil moisture losses brought on by a drier than normal fall.

Latest USDA weather update for eastern FSU

During December, near to above normal temperatures and precipitation prevailed across much of the region.

Despite the somewhat warmer than normal conditions, Kazakhstan and Russia remained encased in a moderate to deep snowpack; agricultural activity in the spring wheat belt is minimal during the winter due to the extreme cold and deep snow cover.

In the south, where the harvest of cotton and other summer crops was completed during the autumn, agricultural activity was likewise relatively minor.

However, winter wheat in eastern Uzbekistan benefited from light to moderate rain and snow (10-30 mm liquid equivalent).

Time for change?

The life of a jet setting international agriculturalist sounds like a glamorous gig and while it does have some upsides you often find yourself wishing things could just be a little more straightforward.

Moving house as projects dictate goes with the territory.  

Over the last seven years we moved on average about every 18 months until 2014 when we moved into five different homes across three countries over the course of eight months and we haven’t stopped.

At the moment we are overwintering in a beautiful farm house deep in the French countryside surrounded by the most perfect, vibrant green fields of wheat, enjoying the cuisine and sampling the reds, definitely very much an upside.

Being back in Europe we arranged for a year’s supply of post to be forwarded to us, in amongst the general guff and junk was a reminder that we needed to register our eldest for school this coming September.  

The problem is we have no idea which country we will be in by September so making a choice of four schools in order of preference was bit of a challenge.

After seven years on the move, producing two children in that time, dealing with decrepit hospitals, failing infrastructure, intransigent bureaucracy, none payment of invoices, pubs like the one pictured and enjoying the company of road police on a weekly basis then a steady safe routine starts to look a bit more attractive.

Possibly.

A look back at 2014 and a peek forward to 2015

Its’s that time of the year to look back at the previous twelve months and to take a peek forward at what the next twelve might bring.

Despite political events and losing big chunks of farmland to aggressive neighbours and locals with aspirations for separatism, Ukraine’s harvest was big.  

The weather was favourable with plenty of soil moisture in the spring and plenty of rain through the growing season.  Final figures for Ukraine’s H14 stands at 63mmt including 24mmt of wheat, 9mmt of barley and 28mmt of maize.

Russia’s weather was less favourable.  Drought was a problem from the outset and through the rest of the season although the final harvest wasn't too bad considering with agrarians bringing in 110mmt including 62mmt of wheat, 21mmt of barley and 11mt of maize.

To put that in context the UK had a blinder of a harvest with 25mmt including 17mmt of wheat and 7mmt of barley.

This year Russian wheat did around 2.5mt/ha and while Ukraine was better than it has been for some time at 4.0mt/ha it is still a long way off this year’s UK record 8.6mt/ha (or the ten year average 7.7mt/ha).

Yet it would be entirely possible to see a 20%, 30% or greater average yield increase within a few seasons through some fairly straightforward, simple and achievable changes to the production process.

This is more likely to occur in Ukraine than Russia primarily because in addition to the better climate (rainfall) EU and US funds have poured in albeit with conditions.  

Depending on your political point of view those conditions could be the long overdue catalyst that reboots Ukraine in to the agricultural power house it should be.

I can see a situation in Ukraine where the current crisis is stabilised and consequently and relatively quickly the business climate and corporate responsibility issues improve, corruption is contained and land tenure is sorted thus opening the door to a tenfold increase in inward agri-investments.  Maybe not all in 2015 but soon.

Without a doubt 2015 will be a difficult farming year in Ukraine as high inflation, foreign exchange and interest rates coupled with a lack of credit will make getting a crop in the ground this coming spring somewhat challenging.

But given support and sensible decisions from Ministry of Agrarian Policy and Food located on Kiev’s Khreshchatyk Street overlooking the site of last year’s demonstrations and shootings, then Ukraine agriculture might just start to step up.

Here’s to a happier new year.

Latest USDA weather update for western FSU

Most winter crops remained adequately insulated from bitter cold by a moderate to deep snowpack.

Across eastern Ukraine and Russia, a moderate to deep snowpack (5-40 cm) protected dormant winter wheat from night time lows below -20°C.

However, wheat areas in northern Ukraine were under a shallow, patchy snow cover (2-5 cm), and were likely exposed to some burnback or possibly even winterkill.

Precipitation, which fell in the form of rain and snow, totalled 10 to 50 mm (liquid equivalent) in southern portions of the region, but was lighter (less than 10 mm) elsewhere.

Latest USDA weather update for western FSU

Winter crops remained adequately insulated from bitter cold by a moderate to deep snow-pack.

Across Ukraine and central Russia, a fresh snowfall (10-35 mm liquid equivalent, snow depths of 5 to 30 cm, locally more) protected dormant winter wheat from temperatures up to 6°C below normal (night time lows below -20°C).

However, key southern wheat areas in southern Russia were spared the coldest conditions, with readings remaining above -15°C; these southern wheat areas are protected by a shallow, patchy snow cover.

Latest USDA weather update for western FSU

Warmer-than-normal weather continued throughout much of the region, alleviating the threat of freeze injury to dormant crops but also keeping southern portions of the region devoid of a seasonal snow cover.

Weekly temperatures were over 5°C above normal across the Ukraine and into southern Russia, with weekly temperatures in the remainder of the region between 1 and 4°C above normal.

In addition to keeping a large portion of the region snow free, the warmer-than-normal weather caused dormant crops to lose some cold hardiness, leaving crops at risk for winterkill or freeze damage.

Meanwhile, 10 to 20 mm of rain boosted moisture reserves in southern crop areas, with snow occurring in more northerly locations.

The Russian Rouble and the implications for farming

It’s all appears to be going very Pete Tong in Russia with the rouble losing 15% against the dollar between Friday and yesterday.

The farming community in Russia is saying it’s all going mental with fertiliser dealer’s reneging on previous agreements and seed and pesticide suppliers refusing to price product.

After previously lifting interest rates 1% and saying they didn't want to panic the market, Russia’s central bank panicked the market by lifting it a whopping 6.5% and making the announcement at 1am after what appeared to be a crisis meeting.

Russian inflation and crude oil prices continue to add to the pressure as oil and gas make up a sizeable portion Russian exports.

Russian Agriculture Minister Nikolai Fyodorov said that he was waiting government approval to raise the intervention price for grain to increase state stocks from 1.5mmt to 3.5mmt and presumably slow down exports at the same time.

They may well happen anyway as the slump against the dollar has created a big disincentive for Russian farmers to sell their grain but to hold onto crop in a wait and see because surely it can’t get any worse type scenario.

If suppliers are not agreeing prices then farmers with crop to sell will have no significant cash flow demands either so best to hold for now.  

Under these circumstances spring is a long, long way off.

Against this background western commentators with no understanding of how Russians tick and who are more used to politicians resigning after tweeting a picture of a white van are incredulous that President Putin's popularity continues to remain buoyant.

Putin is due to give his annual press conference tomorrow, my guess is he will down play Russia's role in the spluttering economy electing to blame western foreign policy and sanctions.

One of the few Russians prepared to go on record with the BBC summed it up when John Simpson asked for her if life was going to be more difficult in the future while standing in the freezing rain at tram stop number three said “yes but it’ll pass, we will survive”.

Latest USDA weather update for western FSU

During November, cold conditions further stressed poorly established winter grains in the north, while winter wheat in key southern growing areas entered dormancy under mostly favourable conditions.

Autumn drought continued from Belarus and northern Ukraine into central Russia, with November precipitation totalling less than 50 percent of normal (locally less than 10 percent).

The lack of moisture coupled with an early onset of bitter cold (-20°C or lower) resulted in poorly established winter grains in more northerly growing areas.

In addition, a lack of snow cover may have resulted in some burn-back or winterkill during the coldest weather.

In contrast, despite a dry November, winter crops in southern growing areas were properly established due to plentiful autumn rainfall.

Therefore, winter wheat from southern Ukraine into southern portions of Russia entered dormancy under mostly favourable conditions and was better able to withstand the late-month bitter cold, despite a relatively shallow snowpack.

...and the latest USDA weather update for eastern FSU

During November, bitterly cold, snowy weather halted late spring wheat harvesting.

In particular, un-harvested spring wheat in southern portions of Russia’s Siberia District remained covered in a moderate to deep snow-pack, with a persistent arctic air mass keeping much of the region encased in snow.

These areas do not typically grow much winter wheat due to the harsh winters.

Snow and cold also halted late autumn fieldwork in the south, though the cotton harvest was reportedly completed before the cold, snowy weather arrived.

Friday's Russian news roundup

Pakistan’s Finance Ministers has told officials from the Commerce and Trade Authority to come up with a plan to export agricultural products to Russia.

He told exporters to take advantage of the ban imposed by the Russian government and that it will enhance overall exports of the country and lessen the current deficit, which is an easier thing to say than do.

He also told Ministries to prepare for World Food Exhibition 2015 in Moscow, I didn't know there was a World Food Exhibition in Moscow next year, I wonder if EU and US food producers are invited.

Russia will ban imports of live poultry and hatching eggs from the Netherlands starting today due to the outbreak of H5N8 in the Dutch village Kamperveen.  As well as poultry the village is renowned for manufacturing mobile leisure vehicles.

The problem with all these tit-for-tat bans is it’s difficult to spot a genuine case when a country is justified in restricting imports, I suspect this is genuine although I thought poultry and hatching eggs would already have come under the general sanctions list.

The on-off Russian export is back on with rumours that Russia will go ahead and limit exports apparently based on a comment by a Russian agriculture minister that the country would attempt to slow exports by raising the intervention price.

All the indicators suggest there won’t be export restrictions which leads one to think that’s exactly what will happen.

Belarus are saying the current embargo by Russia on their exports are unjustified and are hurting several Belarussian companies.

Russia has now said they will let some Belarussian enterprises resume exports to which Belarus responded that it is important to reopen exports for all the enterprises at once instead of two or four.

Vladislav Tsydik, Deputy Chairman of the Agrarian Policy Commission of the House of Representatives of the National Assembly of Belarus (and breathe) said “I am convinced that our products are as good as foreign ones, Belarussian products are organic, environmentally pristine and safe”.  But possibly slightly radioactive.

You have to feel sorry for Belarus, April 1986 the wind was blowing in a northerly direction taking with it the radioactive cloud from Chornobyl before dumping it over large parts of Belarus, no nuclear power stations on its territory but extensive contamination.

I've been to the contaminated regions and abandoned villages in the south of the country, a truly heart-breaking experience.

Have a good weekend.

Definitely maybe no Russian grain export restrictions

SovEcon said Russia’s December grain exports will remain high fuelled by a weaker rouble, which I take to mean exporting grain is a way of generating foreign currency, something Ukraine did when short of cash during the Yanukovych years.

Bunge said they do not see any signs of a possible imposition of grain export limitations by the Russian government and to date the company does not observe any government regulation of the market, and there is no indication that something should happen.

Which all feels a bit like the vote of absolute confidence a football manager receives from the board right before he is given the boot.

French four point beef support programme

I might be a bit cynical here but is it possible that the EU and other countries are using Russian food sanctions as an excuse to push support proposals in through the back door?

I'm not saying that there isn't a genuine effect as a result of the Russian issue but since when did Russia become such a significant trading partner that when it closes its doors the whole of the EU ag sector catches a cold?

The latest country to peg a support programme to the Russian issue is France who have put forward a four point programme to tackle problems arising in the beef sector.

While the French government say the programme is as a result of the Russian embargo they freely admit it has been amplified because of the prospect of the end of milk quotas in March next year.

Surely they have that the wrong way around, the real reason for a support programme is because of the end of milk quotas, the Russian problem just makes for a more palatable narrative.

The four priorities as set out by the French ag minister are in reality only two and come as no great surprise.

Financial aid to farmers from the French government and the EU (will the French government aid programme be supported by EU funds?) and developing export and domestic markets (which presumably require EU funds to administer).

I'm not having a specific go at the French here (I'm overwintering in rural France at the moment so I don’t want to upset French farmers), every EU member state is banging the drum for support and I suppose it’s a case of he who shouts loudest gets heard but may be we should be a bit clearer on the rationale behind the situation.

SigmaBleyzer macroeconomic situation report on Ukraine

SigmaBleyzer have released their latest macroeconomic situation report on Ukraine, the full transcript can be found here but below are a few highlights.

The Ukrainian currency (Hryvnia) continued to depreciate, falling to an historic low of UAH 16.05 per USD.

At the beginning of November, the National Bank of Ukraine (NBU) abandoned an unofficial peg of UAH 12.95 per USD,

A brief period of stability during October was achieved by the NBU forking out $1.4 billion with international reserves now at a ten year low of $12.6 billion.

Anticipated provision of sizeable foreign financial aid should contain Hryvnia depreciation beyond UAH 17 per USD.

The decline of agri exports to Russia has been mitigated to some extent by the growing exports to the EU thanks to unilateral trade preferences for Ukraine, extended by the EU until the end of 2015.

However due to the asymmetry in the structure of agro and food exports of Ukraine to Russia and the EU, exports to the EU are dominated by grains and edible oil (and some meat and dairy products) with fresh produce not being able to find a suitable alternative.

The problem with fresh produce is that Ukraine cannot achieve the quality standards or at least the necessary compliance records required for EU export.

Agri-news from Belarus, Russia and Kazakhstan

Belarus customs officers have restarted inspections of trucks on the border with Russia presumably in retaliation to Russia imposing a ban on the transit of food through Belarus to third countries.

Control over the countries’ borders was previously suspended in 2011 after Belarus, Russia and Kazakhstan had established the Customs Union.

A Russian trade delegation has expressed interest in importing agricultural produce from Zimbabwe.

Head of the delegation said that EU and US trade sanctions had propelled Russia to turn to Latin America, Asia and Africa for agricultural produce, conveniently forgetting it was Russia that imposed food import sanctions.

The head of the delegation went on to say they were interested in citrus fruits and understanding the nature and structure of subsidies because they believed that is the crux of the matter in terms of sustaining farmers, conveniently forgetting Russia has no money to subsidies farmers or that subsidies are a blunt instrument in managing agricultural policy.

Russian President Vladimir Putin was in Turkey last week.

Turkey looks to capitalise on the EU US Russian food sanctions by seeking to increase agricultural exports to Russia.

Turkish Minister Taner Yildiz said “Turkey will not make a choice between the European Union and Russia.  We are developing projects based on our own and mutual interests”.

Absolutely Minister but that will require a level of commitment to a business plan that hinges on politically imposed sanctions which could just as easily be lifted.  Risky.

Iran jumped on the supply Russia with food bandwagon when Deputy Minister of Agriculture said Iran has considerable supplies of food to be exported to Russia including chicken, eggs and fish.

I only hope the fish are not from the festering oil slick that is the Caspian Sea which by all accounts smells like TCP.

Indian Buffalo meat is potentially on Russian and Kazakhstan tables this winter as the Russian veterinary regulator Rosselkhoznadzor and Kazakhstan’s ministry of agriculture report that imports have now been cleared and it is now up to local companies to coordinate deliveries from suppliers.

I assume this is to supplement generic meat demand rather than to supply a niche market in organic buffalo steaks.

Buckwheat

Buckwheat makes it on to the BBC news.

Botanists call Buckwheat a pseudo-cereal because it’s not actually wheat, Russians call it tasty and wholesome.

Rumours that snow has ruined the harvest in the Altai region have caused panic-buying and pushed up the price.

A few week’s back I was in Spain and passed a Russian product shop run by Russians for the extensive Russian ex-pat community hankering after pelmini and smetana, out of interest I popped in.

The lady running the shop said they hadn't had any buckwheat delivered for several weeks but were expecting some soon, possibly, but the price had gone up.

Back in Russia experts are saying stockpiles are plentiful, they see no reason for concern or shortages and rule out any link with the sanctions imposed over the Ukraine crisis.

They go on to say panic-buying is pure and simple hysterics, which kind of describes what panic buying is.

Latest USDA weather update for western FSU

Cold, snowy weather maintained favourable conditions for dormant winter grains and oilseeds.

Across primary southern winter wheat areas of Russia and Ukraine, temperatures averaged 5 to 9°C below normal, with night-time lows dropping below -20°C in the coldest locales.

However, a moderate snow pack (5-15 cm) insulated dormant winter wheat from freeze damage, and a fresh snowfall (2-20 mm liquid equivalent) boosted moisture reserves and insulation from eastern Ukraine into south-western Russia during the period.

Farther north, areas along the border between Russia’s Volga, Southern, and Central Districts may have experienced some burn back or freeze damage, as a shallow snow cover (2-5 cm) likely left some winter crops exposed to temperatures as low as -23°C.

Russia requires $10bn to replace food imports

Despite the patriotic dig for victory rhetoric from Russia, replacing food imports banned by the government in response to western sanctions takes time and money.

Some banned products have found replacements from countries not affected by the ban but presumably there is a limit to how much this will provide particularly for products that have a long production cycle like beef.

While most ministers are saying we have it all sorted, we now have a supply of pig meat and we can make our own mozzarella, the Director from the economy department in the Ministry of Agriculture, Anatoli Kutsenko injected a bit more realism.

On Tuesday he told a conference that to replace imported foods the agricultural sector needed a massive budget allocation and "we'll be unable to solve the task to substantially increase production”.

According to Anatoli, to fully replace banned imported foods by 2020, Russian farmers would need at least 568bn roubles ($10.6bn) of government financed support.

To put that in context federal support for agricultural this year was 95bn roubles ($1.7bn).

Following Putin’s annual state-of-the nation address to parliament earlier today when he warned Russians of hard times ahead and urged self-reliance, it doesn't sound like anything near that amount if at all will be available.

Significant levels of support are unlikely to appear in the near future but I can see a situation when sanctions and import bans are lifted as the political landscape changes.

Which makes for a risky business plan if you hedging on supplying a market created by a political decision which could just as easily be reversed.

Latest USDA weather update for western FSU

Cold, snowy weather maintained favourable conditions for dormant winter grains and oilseeds.

Across key southern winter wheat areas of Russia and Ukraine, temperatures averaged 5°C or less, indicating crops were becoming or already dormant.

In addition, fresh snowfall (5-20 cm) by week’s end afforded winter wheat insulation against potential incursions of bitter cold.

Farther north, winter grains were also dormant from Belarus and northern Ukraine into central Russia, though crops in these areas were poorly established following an unfavourably dry autumn.

In addition, areas along the border between Russia’s Volga, Southern, and Central Districts remained devoid of snow cover, exposing winter crops to this past week’s bitter cold (-20 to -15°C).

Ukraine agricultural requires $5bn annual investment

Effective development of Ukraine agricultural will require an annual investment of $5bn for the next ten years said Oleg Ustenko, Executive Director of the Bleyzer Foundation.

I'm glad he said that because from my back of an envelope calculation I have always said Ukraine needs $50bn to make it a true farming powerhouse.

Mr Ustenko goes on to report that foreign investors are unwilling to invest in Ukraine because of the high level of corruption, administrative barriers and imperfections of the judicial system.

I agree that investors are unwilling invest but I would argue that the level of risk they associate with various issues is over-exaggerated and misplaced.

Investing in farming in Ukraine carries three basic areas of risks.

First there are agronomic problems associated with the weather, particularly cold and drought. What farmers do is mitigate the impact of weather by growing suitable crops, encouraging deep root growth and providing an ideal environment for plants to grow healthy and strong.

Farmers are well used to the idea that farming is a production process in a factory without a roof.

Then there is the perceived problem of theft and shrinkage.  No one who knows anything about doing business in Ukraine would deny that theft is widespread but it is not necessarily as big a problem as perceived.

The trick here is to put in technology, systems and procedures to make it difficult to steal; you won’t eliminate it but you can limit it.

Then there is the all-encompassing issue of corruption.  The subject of corruption requires a thesis of its own but for the sake of brevity I’ll keep to the idea that corruption is the local administration and government all over an investment trying to leverage brown envelopes.

Which is partly true in as much as they do hassle you and require a disproportionate amount of your time but the amount they ask for is a small part of an investment budget.  And to be fair they are usually only asking for support for their budgets which is insufficient to provide for the local community, easier to think of it as an additional local tax.

All these risks can relatively easily be managed and mitigated and are not as big or unique a problem as perceived.

In my experience the main reason investments tend to implode is because investors make the wrong investment, under invest in key areas, underestimate the real costs, over expect yields and prices (particularly in the early years), refuse to listen to and act upon clear information and recommendations and create more problems than is really necessary.

I continue to advise that Ukraine is a sound long term agricultural investment opportunity.

Harvest round-up from Ukraine, Russia and Kazakhstan

First snows starting to fall around the regions and harvesting is nearing completion.

Outstanding crops to be harvested will now be grabbed at in fits and starts with the usual small amount of maize and sunflower left out over winter although it will all be officially reported as being cut.

Ukraine has harvested 62.3mmt of grains and pulses from 14.4mha (97% of the planned area excluding Crimea) with an average yield of 4.32mt/ha.

This includes 25.8mmt of maize from 4.4mha (94%) with an average yield of 5.89mt/ha; 9.9mmt of sunflower from 5.1mha (97%) with an average yield of 1.96mt/ha and 3.8mmt of soybeans from 1.7mha (99%) with an average yield of 2.13mt/ha.

Russia has harvested 110.1mmt of grains from 43.8mha (97% of the planned areas) with an average yield of 2.51mt/ha.

This includes 62.2mmt of wheat from 23.9mha (97%); 21.2mmt of barley from 9.0mha (99%); 11.0mmt of maize from 2.4mha (92%); 8.6mmt of sunflower from 6.2mha (91%); 1.4mmt of oilseed rape from 6.2mha (88%) and 2.5mmt of soyabeans from 1.8mha (93%).

Kazakhstan harvest is slightly up on earlier predictions at 18.7mmt of grains but still down on the previous year’s 20.7mmt.

To date they have cut 14.7mha (98%) with an average yield of 1.27mt/ha.

Moscow's sushi should be safe

Russia has almost completed the rice harvest with 1.14mmt in bunker weight from 187,600 ha (95.7%) at an average yield of 6.1mt/ha.

To put rice in context Russia’s five year average annual production volumes are 1.0mmt or 0.14% of the world rice production and currently rank 36th position in the world.

Earlier this month the Governor of Primorye (about as far east in Russia you can get) met with Vladimir Putin in Vladivostok to discuss creating a programme to subsidise on-shore fish processing and creating a fishery cluster in Primorye.

Actually the decision to create a fishery cluster was made last year, the Governor is now just waiting for the Government to make a decision on financing.

So that's rice in the shed, if we can just get that fish on shore and transported from the far far east, Moscow should be good for sushi.