Mid-week Black Sea agri-news

Despite caution for new grain export contracts between Russia and Turkey, both sides made a

statement that they do not intend to limit grain trade report UkrAgroConsult.

Accordingly two bulk carriers passed through the port of Novorossiysk to Turkey with 33kmt of wheat and 4.9kmt of corn.

UkrAgroConsult also report that the abolishment of grain export duties in Argentina will lead to rise in domestic prices and an increase in grain production with corn plantings already up 10% this year.

More corn and wheat coming on to the world market will tighten competition between exporters, challenging Ukraine as a major exporter and put additional pressure on prices.

Perhaps recognising this (and other related issues) Ukraine continues to drum up markets for its agricultural output, this time meeting with Albania counterparts to discuss cooperation and trade in particular sunflower oil and dairy products.

Russia ministry of agriculture report this year’s harvest at 103.4mmt of grain net weight, exceeding previous forecasts.  

The ministry further forecast H16 to be even higher at 104mmt, naturally.  

However they do make one small concession to current winter crop issues by suggesting H16 wheat harvest could be 60.4mmt, down on this year’s 61.2mmt.

To assist their inexorable climb in output the ministry might listen to the chairman of the peasant farms of Irkutsk who brilliantly and with clarity outlined how the government should help farmers.  

His recommendations included reducing the cost of energy, fuel, lubricants, fertilisers, pesticides and increasing prices while providing financing and loans at low interest rates.  Good luck with that.

A round table discussion held this week agreed that the all-Russian agricultural census in 2016 will reveal promising growth of the domestic agricultural sector and provide material to develop a strategy to overcome the existing problems in the industry.

Participants included representatives from the Federal State Statistics Service and the Department of Agribusiness, heads of municipalities, rural communities, local farms and industry experts.

One participant was reported as saying that "the issue is not as such of food security, but a problem of management related to the lack of accurate data on the current situation… the 2016 census should give us the material to develop strategies to overcome them".

The all-Russian agricultural census will be held during July and August with remote and inaccessible areas completing it during September and November.

Finally, Kazakhstan made headlines this week as British astronaut Tim Peake successfully launched from the Baikonur Cosmodrome to the International Space Station prompting the Telegraph to publish a “19 peculiar things you probably didn't know about the Central Asian republic” article.

The list started off meaning well with interesting peculiar things like Kazakhstan is the world’s largest landlocked country yet maintains a small navy and it is believed that the apple originated there, only to revert to type saying that Kazakhstan is the birthplace of Sacha Baron Cohen's fictional character, Borat.  

I despair. 

Belarus leads the way

If you think your agri-policy makers can be a bit draconian at times, spare a thought for the world’s largest collective farm, otherwise known as Belarus, were agricultural production targets for 2016 have just been approved.

According to Resolution No.1037 of the Council of Ministers, agricultural output is set at 9.2mmt of grain, 1.4mmt of potatoes, 4.8mmt of sugar beet, 518,600mt of vegetables and 113,400mt of fruit and berries.

The resolution goes on to approve how much fertiliser, micro-nutrients, pesticides, diesel, petrol etc. must be purchased and instructions to ensure that at least 95% of agricultural machinery will be in a state of readiness for spring fieldwork before 25 March 2016.

They don't say what happens if they fail to meet the production targets, in the past the trick was to never not meet the production targets at least on paper.

The full resolution will come into force on 1 January 2016 and can be can be found at Белта.

Latest USDA weather update for western FSU

Mild, sunny weather favoured late winter wheat development in the warmest locales but kept the

region uncharacteristically devoid of snow cover.

Following recent drought-alleviating November rainfall from central Ukraine into Russia’s Central District, sunny weather encouraged some late winter grain development in the warmest locales.

However, even with temperatures averaging 2 to 6°C above normal, winter crops were now dormant in most growing areas.

The recent spell of wet, warm weather melted the region’s protective snow cover, with winter crops now exposed to potential incursions of bitter cold.

Meanwhile, winter wheat in southern Russia eased toward dormancy, with weekly average temperatures below 5°C in all but southern-most portions of the region.

Early week Black Sea agri-news

Russian crop exports stood at 17.8mmt (Dec 9, 2015) including 13.4mmt wheat, 2.8mmt barley and 1.4mmt corn. 

That’s down 6% on the corresponding period last year when exports stood at nearly 19mmt.

The EU agricultural commissioner Phil Hogan said the European Commission is taking steps to resume the supply of pork from the EU to Russia.  Phil told journalists in Brussels that "[We are] trying to re-open opportunities for pig meat with Russia," and that the Commission has proposed Russia to discuss possible resumption of pork exports.  Moscow has not responded.

The European Commission has lifted the ban on the supply of poultry meat and eggs from Russia after controlling outbreaks of avian influenza. 

I’m know this story is completely unrelated to the previous story but it makes you wonder if that’s how business is done.

Russia continues to intercept and destroy sanction busting foods slipping in from Belarus, this time with 41mt of Albanian tomatoes the latest casualty.

I didn’t realise Albania are on the sanction list but apparently they are which just feels like bullying to me.

Russia’s head of Federal Agency of scientific organizations said that producing and exporting eco-friendly organic food will help reduce Russia’s dependence on oil & gas exports.  The expert added that Russia food exports exceeded imports and stood at USD 20 billion a year while gas exports generated USD 54 billion. 

I have no idea if those numbers are accurate but a head of science that uses phrases like eco-friendly makes you wonder.

Russia's Central Bank were in a candid mood reporting that the rate of import substitution is slow and that producers could not make up for banned products in most categories of foodstuffs singling out beef, butter, fish and vegetables.

Ukraine start the week in a continuing bullish mood with the minister of agriculture saying they are seeking to attract at least USD eight billion in private investments in the agriculture sector within the next five years. 

The agricultural ministry also reported Ukraine’s grain exports stood at 18.71mmt (Jul 1 to Dec 11), including 9.34mmt of wheat, 5.4mmt of corn, 3.95mmt of barley and forecast a record 36.8mmt grain exports for 2015/16MY, up 6.4% on last year.

Ukraine current grain harvest is 99% complete, report the ministry, at 60.84mmt, including nearly 23mmt of corn.

Latest Black Sea agri-business news

Russia's ministry of agriculture issued a draft budget allocation of 1.35bn roubles to modernise greenhouses & dairy farms.

Novgorod's governor reported two investments worth RUB 2.6bn (USD 400m) including an 800 cow dairy with an annual production of 7,000mt.

Russian agro holding Miratorg consider a project to produce 4m pigs per year but acknowledge no clarity on state support.

Russian farming business Kuban Agro & European seed producer Maïsadour Semences have agreed to launch a joint partnership seed business.

Russia's minister of agriculture signed an agreement with VTB and SEMMARIS to create Russia’s largest wholesale food market "Agropark Maksimikha", estimated to cost 40bn RUB.  Construction will begin in the second half of 2016 and is scheduled to complete in 2018.

Russia's minister of agriculture report they will soon bring back 10mha of unused agricultural land back in to production and that about 250kha of agricultural land within in the Moscow suburbs are not currently in use.  Putin threatens to withdraw land from unscrupulous owners of agricultural land and sell it at auction saying it is necessary to put into circulation millions of hectares of idle arable land.  The minister of Karachayevo-Cherkessia responded by saying all his arable land is in active use while the deputy governor of Bryansk said 240kha of land currently not in use could be brought back in to production.

Russia's agriculture minister reported this year they produced more wheat, sugar beet, vegetables and buckwheat, that it was a record harvest for maize, soya, oilseed flax and meat production is up 5%.  He went on to report the current harvest was at about 102mmt of grain in net weight which will close domestic needs and retain export potential of 30mmt.  He also mentioned that it is necessary to increase the number of dairy cows by 1 million and to increase milk production by 6mmt within five years.

In 2015 Russian farmers purchased 2.4mmt of fertiliser, up 4% on 2014 and will purchase 2.6mmt in 2016, reported the deputy minister.

Russia's department of animal husbandry and breeding of ministry of agriculture reports the provision of winter cattle feed is at more than 100%.

Rosstat data reported that as of November 1, 2015, Russia’s Grain stocks are 43.5mmt, the same as on October 1.  At 43.5mmt Russia's November 1 grain stocks represent one of the highest levels recorded in the last 5 years.

Russia & China have agreed delivery protocols for Russian grain paving the way for exports to commence later this month.

Russia's deputy minister of agriculture says this year’s lower than expected salmon catch was due to forecast errors and a number of biological factors; sounds like someone is about to get the sack.

One of Russia's largest fish breeding facilities in Krasnodar will resume production of sturgeon, grass and silver carp after an eight year break.

Russia’s deputy agricultural minister reports there are no plan to restrict grain trade with Turkey although traders are being cagey about signing up new contracts not wanting to get caught up in an escalation of sanctions.

Meanwhile Russia returned 50mt of mandarin oranges to Turkey citing contamination with fruit-fly larvae.

Russian pig business "Znamensky SGC" get around sanctions by importing 29 Hypor boars from Canada; the lads travelled & settled in well by all accounts.

Ukraine now and the deputy minister for European integration said that "agriculture provides the largest share of foreign currency revenue" and that "this year Ukraine agri-exports totalled USD 13bn, almost 40% of total exports".

Ukraine's agricultural minister said "by 2020 we plan to increase [exports] to 40-70mmt of grain [and] harvest 80-100mmt, our goal is to export over USD20bn".

Ukraine's agriculture ministry has fulfilled 80% of the planned reforms for this year as part of the on going deregulation policy reports the National Council Reform project manager .

FAO report released this week paints a bleak picture for small-scale, family-run farms in eastern Ukraine, the report can be found here.

Ukraine corn harvest now 97% complete at 22.4mmt with average yield 5.6mt/ha, down from 6.0mt/ha in 2014, I wonder how much lower inputs played a part and if that will carry over into 2016 cropping? 

This winters sowing progress was significantly lower and slower compared to recent years.

Ukraine formally extends the ban on farmland sales until Jan 1, 2017 which should have come as no great surprise to anyone.

And finally Ukraine's ministry of agriculture implement a uniform labeling system for Christmas trees to confirm legality saying that if it doesn't have a label it may have a dubious origin.

Ukraine's agricultural policy increases world market competition

On Tuesday Ukraine’s agriculture ministry outlined its five year, 10-point plan to develop the country’s agricultural sector.

This includes intensifying efforts to draw investment to farming by improving conditions for doing business, revising its food-security policy and implement reforms in land, taxation and associated institutions.

The plan targets increasing the competitiveness of Ukrainian agricultural products and raising exports.

  

This week Ukraine’s minister of agriculture and other spokespersons reported the agricultural exports for 11 months of this year totalled more than USD13bn, almost 40% of Ukraine's total exports and that agricultural exports provide the largest share of foreign currency revenue.

Ukraine is a cash poor country with few options to generate income to kick start the economy, IMF and EBRD handouts will only go so far.

The minister also stated that "by 2020 we plan to increase [exports] to 40-70mmt of grain [and] harvest 80-100mmt, our goal to export over USD20bn."

I paraphrase and his five year plan might be overly optimistic but the intentions are clear.

On a practical basis away from the grandstanding, the ministry reported they have fulfilled 80% of their planned reforms aimed at deregulation of the agriculture sector and, along with continued efforts to deal with corruption, will improve Ukraine’s ease of doing business and corporate governance making it easier for investments to take place.

Investments will be what drives Ukraine's agricultural development.

There was also the quiet news that slipped under the radar this week about how Ukraine adopted a Law on seed and seedling legislaton. (See "Did Ukraine just reach a tipping point?" below).

Which all bodes well for Ukraine, less so for farmers elsewhere. 

I often receive comments from farmers around the globe (understandably) griping about how reports of Ukraine increasing grain output and exports doesn’t help prices which is fair enough.

When asked, the advice I give is that you need to be aware this is happening and to look outward at what’s going on around the world, this isn't going to go away.

Even if supply and demand balance, Ukraine and other places like it will always be able to compete on price, their competitive advantages mean the cost of production will always be lower.

Western farmers need to capitalise on their strengths such as marketing, traceability, reliability and quality along with pretty good environmental credentials to give consumers a choice along with cutting the cost of production.

I went to a UK trade show a few weeks ago, one comment still ringing in my ears was from a farmer who said yes, he understands all that but at the end of the day he just want's to grow crops.  

Good that he does but judging by the hi-tech, expensive machines on display, while he he is working hard growing crops he is in danger of being a conduit funneling EU funds to Mr Deere while his business is perpetually broke.

I also overheard a conversation in a shop, the lady was complaining her bread maker wasn’t working properly, the shop assistant told her that she needed to buy quality flour as flour made from UK wheat was no good.

Undoubtedly the task ahead is a big one.

Latest USDA weather update for western FSU

Rain and snow eliminated the vestiges of autumn drought in Ukraine and west-central Russia, while warm, rainy weather favoured winter wheat development in southern Russia.

A pair of disturbances produced moderate to heavy rain and snow (10-45 mm liquid equivalent) from central Ukraine into Russia’s Central District.

Due to the recent month-long spell of wet weather, most of the region’s lingering 90-day deficits have been eradicated.

The precipitation provided additional moisture for late winter wheat establishment in the still vegetative southern growing areas.

However, even with warmer-than-normal weather for the week (2-5°C above normal), weekly average temperatures below 5°C (the threshold for dormancy) encompassed northeastern Ukraine and the northern and central Southern District.

In addition, a shallow to moderate snow cover (2-15 cm) was on the ground from northern Ukraine into Russia’s Volga District, though increasing warmth began to erode the snow by week’s end.

Consequently, the late-autumn rainfall may not have been in time to ensure proper winter wheat establishment in the aforementioned drought areas, leaving crops particularly vulnerable to the region’s often harsh winter weather.

Meanwhile, winter wheat in southern Russia developed favourably with renewed shower activity (10-45 mm) and temperatures up to 4°C above normal.

Did Ukraine just reach a tipping point?

Ukraine’s parliament has just adopted a law to bring seed and seedling legislation in line with European and other international standards.

Seems innocuous enough and detail is sketchy but if this means what I think it means it could have far reaching ramifications for Ukraine agriculture and the global grain trade as a whole.

One of the biggest restrictions to Ukraine increasing cereal grain output is plant genetics; to put it bluntly Ukraine domestic wheat varieties are, by and large, not very good. 

They produce few (if any) tillers (shoots), the grains per ear is (woefully) low resulting in a low number of total grains (tonnes) per hectare.

You can throw as much nitrogen and pesticides at it as you like but if the genetic potential is low it’s going to stay low.

In the past legislation all but barred the import of seed wheat and barley varieties (not corn or oilseeds though) by creating barriers to make it an economic proposition, presumably done to protect Ukraine’s crumbling seed breeding industry.

This new piece of legislation could be the catalyst to open up the market to imported cereal seeds which have the potential to double wheat yields within a season or two.

That might be an oversimplification, you have to have better husbandry to allow better genetics to reach its potential but the reality is there are a awfully lot of very good farmers in Ukraine who could do just that.

This year Ukraine will export around 11mmt of wheat or 7% of the worlds trade; a modest yield increase of, say, 20% could increase exports to 16mmt plus.

Today could just have been a very important day indeed for Ukraine and agriculture as a whole.

Latest Black Sea agri-business news

Russia’s first deputy minister of agriculture reports there are no plan to restrict grain trade with Turkey in light of events surrounding the shooting down of a Russian fighter jet by Turkey.  

Perhaps not, but the smart money is on things getting worse before they get better so traders will be looking for alternative supplies rather than risk getting caught up in an escalation of sanctions and embargo's.  

Unsurprisingly Ukraine has stepped up to the plate and told Turkey they would be more than happy to supply grain and other products should they so wish.

Yesterday Russia's minister of agriculture signed an agreement along with VTB and the French company SEMMARIS to create Russia’s largest wholesale food market "Agropark Maksimikha".  

SEMMARIS manage Rungis International Market, the world’s largest high-tech food and logistics centre, located in Paris.  

The 300 hectare distribution centre to be constructed in the Moscow Region is estimated to cost about RUB 40 billion and is scheduled for completion in 2018.  

The Russian ministry of agriculture will provide subsidies and compensate 20% of direct construction expenses, because, they say, these projects help achieve a number of priority goals in the agriculture industry.

Earlier this week Russia’s minister of agriculture gave a speech at the equivalent of PMQ’s but without the questions, where he outlined recent points of interest.  

Points of interest include this year’s harvest at about 102mmt in net weight; export potential is 30mmt; this year Russia managed to produce more wheat, sugar beet, vegetables and buckwheat; it was a record harvest for maize, soybean and oilseed flax and meat production increased by 5%.  

Bad news for the world’s dairy farmers was issued when he said it is necessary to increase the number of cows by 1 million to increase production by a further 6 million tonnes within the next five years.  

That might help Russia’s food security but it’s going to do nothing for prices in an already over supplied market.

Ukraine has received an official response from the European Union on ten dairy enterprises officially accepted as having been audited thereby opening the door to European market.  

EU policy towards Ukraine has publicly and consistently been to open up markets as part of the wider integration and development so it shouldn’t come as a surprise but it will undoubtedly be seen as further negative news by EU’s beleaguered dairy farmers. 

It’s not likely to get any better either, Ukraine’s minister of agriculture points out that "European certificates enable an increase in exports of dairy products not only to Europe but also to other markets including Asia and Africa”.

Another small story to slip out of Ukraine this week was President Poroshenko extending the moratorium on farmland sales until Jan 1, 2017.  

The moratorium first came into force over a decade ago and despite commentators (and speculators) saying (and hoping) it would be lifted anytime soon, it hasn’t.  And neither is it likely to be.  

Ukraine land ownership is such a political hot potato it will take a very strong government to bring in the necessary legislation to make the sale, ownership and trade of land a possibility.

Even the most optimistic of us can’t see a sufficiently strong Ukraine government, in relation to land sales, for some considerable time to come.

Weather in central Russia has been unseasonably mild with daytime temperatures approaching double figures which is not necessarily good for crop development.  

I mentioned this in a tweet earlier in the week and turns out Canada and North America is having similar weather; won’t be long before speculators pick up on the news and the market bounces upwards as a consequence.  Possibly.

Ukraine and Netherlands have agreed to launch five joint projects in sustainable agriculture and rural development.  

Details are sketchy but along with a delegation of USDA who were in Kyiv to assess the need for further assistance programs, support for Ukraine agriculture and food continues to remain buoyant.

Finally, Ukraine has just approved the reform strategy for development of agriculture through to 2020.  

The minister reported the strategy provides a roadmap for reforming Ukraine's agricultural sector and is aimed at strengthening competitiveness, improving the business climate, increasing exports and to stimulate investment in the agricultural sector.  

I will report on further details as and when it becomes available.

Update on Ukraine

Earlier this week Ukraine’s ministry of agriculture reported harvest was 99% complete with 14.5mha producing 60mmt of grains and leguminous crops yielding an average 4.1mt/ha.

In 2014 Ukraine produced 63.8mmt (4.3mt/ha) and 63.0mmt (3.8mt/ha) in 2013 so although this year’s total crop is down the yield per hectare compares favourably.

Every year is difficult in farming but this last year in Ukraine was another difficult year after a succession of difficult years.

The fact that Ukraine farmers still managed to produce a 60mmt crop given the high cost of production, low commodity prices, limited credit and diminishing cash reserve is testament to the ability and progress Ukraine agriculture is making and indicative of where it could get to in the near future.

If Ukraine can produce a 60mmt crop in difficult political and economic circumstances and with no cash, imagine what it could do with investment.

The weather plays a big part in determining yields and although 2015 started off hesitantly with overwintered crops in some regions looking a bit worse for wear, by and large crops across the country looked very good post winter and throughout the season. 

During 2015 we crossed the country on several occasions assessing the condition of the crops and although we scored more rigorously than the self-assessment scores the ministry produce I have rarely seen better looking crops in Ukraine (drop me a line if you would like to see those reports).

Looking forward and new cereal crop planting has reached 6.7mha, down 10% on the forecast.

This includes 5.6mha of winter wheat, down 550kha and 879kha winter barley, down 167kha. 

Spring planting will take up some of this slack but not all of it and the spring crop will yield lower than winter crops so total production will be down.

How this impacts on next season’s exports is the current topic of conversation.

The ministry (or at least one spokesperson) is perhaps being overly pessimistic when talking of 3.5mmt wheat exports, the USDA are widely optimistic at 15mmt and will adjust this with the next release of data.

With the planting season now closed the variables in determining how much will be exported will be Ukraine’s policy on exports and how the crop yields overall?

Despite the pessimistic noise from the ministry, exports will likely remain bullish as this is the only credible source of income outside IMF handouts.

Crop yield is on the back foot in south and east Ukraine with delayed germination but it has improved slightly in recent weeks and other regions are reporting that the crop is looking good (at least my contacts are reporting to me).

The key now will be the condition of the crop when it emerges from the winter.

Don’t write off Ukraine exports just yet.

Latest USDA weather update for western FSU

Rain and snow further eased drought in Ukraine and western Russia, while warmth favoured winter wheat development in southern Russia.

Another round of rain and snow (5-30 mm liquid equivalent, locally more) continued to alleviate the vestiges of autumn drought from central Ukraine into Russia’s Central District.

While not enough to completely eradicate lingering 90-day deficits, the precipitation provided additional much-needed moisture for late winter wheat establishment in the still-vegetative southern growing areas.

However, weekly average temperatures below 5°C expanded southward into central Ukraine and the northern Southern District, indicating winter wheat in these areas was now dormant.

In addition, a shallow snow cover (2-10 cm) was now on the ground from eastern-most Ukraine into southern portions of the Central District as well as the northern Southern District.

Meanwhile, winter wheat in southern Russia developed favourably under sunny skies and above normal temperatures (5-8°C above normal); in the Krasnodar Oblast in the southwestern corner of Russia’s Southern District (a key wheat producer), most stations have received over 100 mm of rainfall since October 12, supporting good prospects for winter wheat establishment.

Ukraine crop tour

The crop news out of Ukraine is that winter grain plantings are down and crop condition is poor in the central and southern regions.

Temperatures are holding up and recent rains will have helped but it’s difficult to assess how much without walking crops.

Next week I will travel through some of the problem areas to assess the current situation and judge the condition of the crop as it goes in to the winter.

Contact me if you would like to subscribe (£100) and receive a copy of the tour report with access to the tour twitter account including pictures and video.

All support is greatly appreciated.

Email: agronomy.ukraine@yahoo.co.uk

Russia to control agri-product imports from Turkey

Russian has announced they will strengthen the control of supplies of agricultural products and foodstuffs from Turkey.

Although it is not specifically stated in the announcement, the action is presumed to be in direct response to the shooting down of a Russian fighter jet by Turkey earlier this week.

In a statement the Russian Minister of Agriculture, Alexander Tkachev said he has informed his government that on average, 15% of Turkish agricultural products do not comply with Russian standards.

He goes on to say that since the beginning of 2015 there are about 40 cases of banned residues and harmful substances in Turkish animal origin products and a significant excess of the maximum permissible levels of pesticides, nitrates and nitrites in fruit and vegetables.

The response has been to instruct Rosselkhoznadzor (Russia’s veterinary and phytosanitary service) to put strict control of delivery of agricultural products and food from Turkey and arrange additional checks at the border.

In a separate statement Tkachev went on to lay out the scale of the agricultural products and foodstuff trade between the two countries stating that during 10 months of 2015, imports of agricultural products and foodstuffs from Turkey were valued at 1.035 billion US dollars.

Tkachev went on to say that Turkish citrus fruit and vegetables account for 25% and 20% of the total supplies to Russia and that, if necessary, they could be substituted with imports from Iran, Morocco, Israel, Azerbaijan, Uzbekistan, South Africa, China, Argentina, Abkhazia and Georgia.

The Minister further stated that so far this year Russia has exported 3.5mmt grain to Turkey - nearly 12% of total exports of grain - and that in the event of the termination of grain exports to Turkey, Russia would look to Middle East and African countries as export destinations.

Russian agri-business news and comment

Moscow Region has been announced as the leader in agriculture this year, outperforming all other regions 2015 harvest by 0.8mt/ha.

Possibly as it’s closest to Moscow (and investors) and gets a bit more attention; like the way fields nearest the home farm always seem to yield the best.

Stavropol administration report they will transfer ownership of seven areas of federal agricultural land totalling 130,000ha.  

It’s not entirely clear who the land will pass to as the head of the Federal Agency for State Property Management, Olga Dergunova, said they still need to work out the mechanism of transmission and determining ultimate ownership, be that Stavropol region or municipality.

One thing Dergunova did say was that “our position of principle is to keep (the land) in public ownership” and “the privatization of this land is unacceptable” which all sounds a bit like a football team board giving their full and unquestionable support of their manager right before they sack him.

(Anyone taking bets on how long Rafa Benitez has left at Real Madrid?)

According to Ministry of Agriculture market data, poultry production in Astrakhan has increased by almost 10 fold and farmers continue to work on replacing imported products.  

The increase is driven by investment in JSC Astrakhan Product (Астраханский продукт) who commissioned a new automated cell broiler plant which they report will allow 700mt/yr of poultry meat to be produced with a long term view of expanding to 10,000mt/yr.

Earlier this week Russia’s Minister of Agriculture, Alexander Tkachev, held a working meeting with Governor of the Novgorod on the development of agriculture in the region.

The Minister touched on a number of points during the meeting but the main issues was to accelerate the substitution of imports by encouraging investment in to priority points of growth.

So no sign that Russia’s food sanctions will be ending anytime soon but with the Ministry releasing the latest year to date output figures for livestock and poultry up only 4.8% on the same period last year, it looks like the Minister still has his work cut.

The Min of Ag report sugar beet harvest to be 98% complete with 37.6mmt (factory weight) of sugar beet lifted yielding 38.0mt/ha compared to 33.1mmt and 37.0mt/ha in 2014. 

I can’t find any information on the current sugar percentage but I believe it is generally higher than the 16% we see in western Europe.

Russian Min of Ag announced they will allocate 25 billion rubles (£252m) to support the dairy sector in 2016.

This year, Russian self-sufficiency in milk production reached 81% although according to the Ministry, Russian's consume a quarter less milk products than the recommended standards.

I find that hard to believe based how Smetana turns up at every meal of every day in Russia (see picture).

Latest USDA weather update for western FSU

Rain continued, further easing drought in Ukraine and Russia’s Central District while maintaining favourable winter wheat prospects in southern Russia.

In the region’s hardest-hit autumn drought areas (central and eastern Ukraine into Russia’s Central District), 7-day rainfall totalled 10 to 60 mm.

While not enough to eradicate the lingering 90-day rainfall deficits, the precipitation provided additional much-needed moisture for late winter wheat establishment in the still vegetative southern growing areas.

Despite the warmer-than normal conditions, weekly average temperatures remained below 5°C from northeastern Ukraine into the Central District, indicating the rain was too late to aid winter wheat establishment in these more northerly crop areas.

Meanwhile, winter wheat in southern Russia benefited from another timely soaking, with 10 to 40 mm reported over many of the major wheat oblasts in Russia’s Southern and North Caucasus Districts.

In the Krasnodar Oblast in the southwestern corner of Russia’s Southern District (a key wheat producer), most stations have received 105 to nearly 140 mm of rainfall since October 10, supporting good prospects for winter wheat establishment.

Monday Black Sea crop news

Russian harvest is all but finished at 108mmt in bunker weight including 63.9mmt of wheat, 18.3mmt of barley, 12.2mmt of corn, 9.4mmt of sunflower and 2.8mmt of soya.

Ukraine harvest is 59mmt in bunker weight including 21.0mmt of corn, 2.2mmt of sunflowers and 3.7mmt of soya.

Kazakhstan harvest is officially finished at nearly 20mmt of grains in bunker weight up 5.8% on last year including 14.7mmt of wheat, up 2% on 2014.

Russian winter crop plantings stand at 16.3mha, down 7% on last year and Ukraine winter crop plantings are 6.6mha, down a significant 13% on last year.

Russia has exported 15.5mmt of grain so far in 2015/16MY, down 9.2% on the same period last year, including 11.7mmt of wheat, 2.5mmt of barley and 1.1mmt of corn.

In the same period Ukraine exported 15.6mmt including 8.4mmt of wheat, 3.5mmt of barley and 3.5mmt of corn.

Weather in Ukraine and Russia is cloudy and cold with daytime temperatures up to 8C/46F and lows around freezing with it getting colder as the week progresses.

Friday Black Sea roundup

Ukraine’s Ministry of Agriculture and grain traders have now signed a Memorandum of

Understanding agreeing to voluntarily limit wheat exports to 16.6mt in the coming year.

Last year wheat exports ran to 11.3mmt and the year before 9.8mmt, so on the face of it a 16.6mmt cap shouldn’t come into play but what is actually written in the MoU?

Does it contain caveats that allow the Min of Ag to change the cap without getting the traders around a table?

I doubt it but it does make you wonder why the agreed to a limit that is highly unlikely to be breached anyway.

With the current total Ukraine harvest about to reach 60mmt the Minister of Agriculture, Oleksiy Pavlenko is sticking with total exports at 36mmt and domestic consumption at 24mmt saying “these figures provide the appropriate level of food security and increasing export ambitions".

The important bit there being "increasing export ambitions" as despite Fitch raising Ukraine's long-term foreign currency default rating to 'CCC', the country is desperately short of cash with grain exports being one of the few options to generate income.

Elsewhere rains arrived in the dry Black Sea regions, probably too little and too late to have much of an effect in Ukraine but farmers in southern Russia are telling me they had a good soaking last week with double the amount of rain they had this time last year.

Farmers north of central Russia are also tell me things aren’t too bad so the issue seems to be around that central area of Voronezh, Rostov and Volgograd.

(If we have enough time before snow sets in I hope to go and have a look.)

On a more upbeat note the Russian PM, Dmitry Medvedev declared this week that Russia will double its grain export volumes to 35-40mmt by 2020.

Not to be outdone Ukraine’s Minister of Agriculture also announced this week that Ukraine is capable of doubling agricultural production when investment in agriculture is increased.

Sounds easy when you say it fast but considering that collectively Ukraine and Russia account for around a fifth of the world wheat trade then even a modest increase in production would have repercussions for grain growers around the world.

It’s also worth keeping in mind that Ukraine currently limits itself to only using domestic wheat varieties, many of which are low yielding and predate the revolution (you decide which one).

But a swift change in legislation could readily allow the import and use of much higher yielding western European varieties with immediate impact on production.

It’s also worth keeping in mind that the current Minister is actively focusing on de-regulating Ukraine’s bureaucratic agriculture sector.

Praemonitus praemunitus, have a good weekend.

Ukraine, autumn 2015 Crop Tour

Ukraine wheat exports account for around 10% of the global wheat trade so crop condition plays an important role in determining world market prices.

The news out of Ukraine is that winter grain plantings are down 11% on last year and what has been planted is struggling in dry conditions with nearly 40% not yet germinated and 20% in poor condition.

The head of Ukraine's state weather center has said “the situation is very bad, we still have four huge regions where crops are in very poor condition".

Unsurprisingly analysts are cutting 2016 forecasts to between 14 and 18mmt, down from last year’s 25mmt.

However it might not be all bad news as recent rains, albeit light, will have helped and as temperatures hold up it’s possible the situation might not necessarily be as negative as reported.

Outside the dry south and eastern regions the situation is more upbeat with soil moisture and warm temperatures encouraging good crop development.

The best thing to do then is to go and have a look and report back.

As such I will be drive through Ukraine to assess the condition of autumn planted grain and oilseed rape crops and carry out rapid and detailed appraisals to give an unbiased and independent report with comments, observations and photographs.

Drop me a line if you would like to subscribe (£100) and receive a copy of the tour report and have access to the tour twitter account.

Also let me know if you would like to see previous reports from last season.

Email: agronomy.ukraine@yahoo.co.uk 

Latest USDA weather update

Western FSU

Showers overspread the region, easing drought in Ukraine and Russia’s Central District while maintaining favourable winter wheat prospects in southern Russia.

The core of the region’s drought extended from central and eastern Ukraine northward into Russia’s Central District.

In these areas, 7-day rainfall ranged from 10 to 30 mm (locally more).

While not enough to eradicate the pronounced 90-day rainfall deficits, the precipitation provided much-needed moisture for late winter wheat establishment in the still-vegetative southern growing areas.

However, weekly average temperatures remained at or below 5°C from northeastern Ukraine into the Central District, indicating the rain was too late to aid winter wheat establishment in these more northerly crop areas.

In contrast, winter wheat in southern Russia benefited from another timely soaking, with 20 to 50 mm reported over many of the major wheat oblasts in Russia’s Southern and North Caucasus Districts.

Dry weather in Ukraine and Russia puts pressure on grain output

The weather in Ukraine and Russia continues to make news as dry conditions delay germination of recently planted winter crops.

Ongoing drought conditions through central and eastern Ukraine and central Russia have put a dent in the aspirations of the 2016 grain and oilseed crop.

The 60-day precipitation ranged from less than 10% of normal in central Ukraine to 25% in other regions and there are reports of crops failing to germinate.

Farmers delayed drilling waiting until conditions improved, which they didn’t, or have decided to wait until the spring has meant that plantings in Ukraine are down 11% on last year and 5% in Russia.

Some of this shortfall will be made up in the spring but spring crops generally yield lower than autumn sown crops.

What has been planted is not in ideal condition either; nearly 40% of Ukraine's planted crop (already down 11% on last year) has not germinated and 20% of what has emerged is reported in poor condition.

One of my contacts in southern Ukraine told me last night they didn’t plant half of their winter cropping programme and what is up is at one leaf stage making it vulnerable to cold weather.

However contacts in other parts of Ukraine and Russia tell me conditions look much better with moist soil and warm weather contributing to rapid germination and good establishment.

Black Earth Farming in central Russia report their 38,000 hectares of winter crops to be "in excellent condition".

Clearly there is an issue in parts of Ukraine and Russia but as is often the case the picture is not necessarily as clear as is reported.

To try and bring some transparency I am planning a Crop Tour through Ukraine in the next few weeks.

As with previous tours I will travel through selected regions of Ukraine making rapid and detailed appraisals on the crop condition.

I will take photographs and video’s, tweet observations through a subscribers only account and produce a full report on completion.

If you think an unbiased, independent, boots on the ground appraisal is of interest to you and would like to support us in our work then drop me a line and I’ll sign you up and send you an invoice for £100.

Thanks for the ongoing support.

If there is time before the weather changes we will conduct a tour through selected regions of Russia, I will make a separate proposal in this case.

Latest USDA weather update

Western FSU

Sunny skies exacerbated drought in parts of Ukraine and Russia’s Central District but favored winter wheat development in southern Russia.

The core of the region’s drought extended from central and eastern Ukraine northward into Russia’s Central District.

In these areas, 60-day precipitation ranged from less than 10 percent of normal in central Ukraine to 10 to 25 percent of normal in western and southern portions of the central District.

Furthermore, weekly average temperatures have dropped below 5°C in most of the drought-afflicted crop areas, indicating the opportunity for proper winter wheat establishment has ended.

In contrast, winter wheat in southern Russia benefited from the sunny skies and near normal temperatures following recent rain, with weekly average temperatures above 5°C supporting some additional crop growth.

Normal service has been resumed

Back on line after a brief sabbatical, thanks for all the messages of concern.

Truth is in all the years I have been living, travelling and working in the FSU the only time I have ever felt threatened was when I returned to the UK and went out for a beer on a Saturday night.

The world in general has risks and so long as you take sensible precautions like wearing a seatbelt and not looking too much like a tourist then you’ll be fine.

The problem with UK market towns on a Saturday night is the threat of booze fuelled random violence is impossible to predict and can come out of anywhere.

As can muggings.

I had to return to the UK recently and needed internet access so I popped along to Vodafone and was diligently supplied with SIM cards for phone and iPad and put on the best and most expensive tariff to give me unfettered access to the web.

Problem was that after two weeks I had used up all my allowance even though I was doing next to nothing other than checking emails.  

I had everything switched off so couldn’t understand why I was bleeding data from my allowance so I popped back to Vodafone to see Darren who couldn’t understand it either.

Long and short of it was after two weeks and six trips back to see Darren and his colleagues, Vodafone fleeced me two hundred and twenty quid for reading emails twice a day.

Quick google (from a café) and it turns out the internet is full of stories from customers who have been mugged by the tax dodging phone company.

I have since disposed of all my Vodafone SIM cards, vowed never to use the company again and awarded them top place in my list of least favourite companies’ right above Gold Car.

It’s good to be back.

Latest USDA weather update

Western FSU

Unrelenting drought in parts of Ukraine and Russia’s Central District contrasted with additional beneficial rainfall in southern and central Russia.

In western-most growing areas, sunny skies and near-normal temperatures followed last week’s rain, encouraging winter wheat development from Moldova into western Ukraine.

Meanwhile, scattered light showers (mostly less than 5 mm) in central and eastern Ukraine as well as southern portions of Russia’s Central District offered little - if any - relief from drought; over the past 90 days, precipitation has tallied a meager 25% of normal or less in many of these core drought areas.

Consequently, prospects for winter wheat establishment are bleak where crops were sown due to a lack of moisture and the approach of seasonally colder weather.

Farther east, a slow moving cold front produced 5 to 30 mm of rainfall from the eastern Black Sea Coast northeastward into the Volga District, further improving soil moisture for winter wheat.

However, only crops in the North Caucasus and lower Southern Districts were able to benefit from the moisture, as weekly average temperatures from the central Southern District (Rostov Oblast) northward were below 5°C, indicating crops in these northerly locales were dormant.

Russian Crop Tour day one

Yesterday we completed day one of our Central Russian Crop Tour with some interesting

observations.

After the first worrying crop assessment – see picture – things improved somewhat.

On the whole things are looking reasonable although reports from further south are less bullish and I have my doubts about what we will find further east based on what we saw last month.

We will complete the tour over this weekend with a report coming out soon after, if you would like a copy of the report (£100) and would like to support our ongoing initiative to provide an independent, unbiased and honest assessments of the Black Sea crops – and let’s face it there’s not a huge amount of information available – then drop me a line and I’ll register you.

To those who have already registered an interest I will get back to you shortly.

Just out of interest we have covered 21,000km looking at crops so far this season and will probably finish the year with 29,000km when all done, not a bad first year.