Friday, 27 November 2015

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.


Thursday, 26 November 2015

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.

Wednesday, 25 November 2015

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).

Tuesday, 24 November 2015

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, 23 November 2015

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, 20 November 2015

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.

Wednesday, 18 November 2015

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.


Tuesday, 17 November 2015

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.

Thursday, 12 November 2015

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.

Wednesday, 11 November 2015

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.

Tuesday, 10 November 2015

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.