Thursday, 7 August 2014

Ukraine wheat yields up

International agri-businesses, as in large scale, progressive and not small scale, cash strapped, local farmers, are announcing some heady winter wheat yields.

Trigon Agri managed 5.61mt/ha in Kharkov and an impressive 5.99mt/ha in Kirovograd.

Kernel Holding is reporting 5.60mt/ha from 30kha of winter wheat.

All of this is great news and a combination of good management and favourable weather is rightly being cited as the reason for improved crop productivity.

But in the Ukraine agri-business environment this news could have repercussions that are less than good.

If you look at farming around the world, simply put they are either low input output large scale systems as found in Australia and Canada or high input output small scale systems such as those in parts of Europe.

What is being tried in Ukraine is high input output over large areas and is without precedent.

Early on in Ukraine’s agricultural renaissance it became apparent that simply lifting high yielding agri systems from Europe and the USA and dropping them into Ukraine didn't work.

The fundamentals of farming remained but Ukraine has its own unique set of issues that eroded anticipated high crop yields. 

Add to that the issue that businesses were trying to implement a farming system that had not been tried with problems we hadn't anticipated and you can understand why the financial results and physical performance were all over the place.

The point I’m leading up to is that Ukraine agri-business are still immature, have over stretched and over promised and are often run by none farming management with short term views who react to markets. 

So if wheat yields well this year it will be gung-ho into wheat this autumn followed by a scratching of heads when for a multitude of reasons it doesn't do as well as we had expected.

It is no joke when I recount stories of investors or accountants who seriously argued to grow 100% oilseed rape or 100% seed potatoes because these were the most profitable crop that year.

While you don’t strictly need farmers to manage these large agri-businesses it does help to have that long term view and grudging acceptance on board that not every crop in every year is going stick rigidly to the plan.

We have rotations to spread risk, they teach you that in week one at agricultural college.

Ukraine harvest update

Ukraine has harvested 31.2mmt of early grains and pulses from 8.8mha.

This is 90% of the planned areas without Crimea giving a yield of 3.54mt/ha.

At the same point last year they had harvested 29.4mmt from 9.5mha with a yield of 3.11mt/ha.

This year’s harvest was slow to get started but seems to have caught up and past last year both in terms of timeliness and yield.

Scores on the doors are winter wheat 3.89mt/ha; winter barley 3.02mt/ha; rye (or as I call it, why?) 2.49mt/ha; oats 2.42mt/ha; peas 2.39mt/ha; winter oilseed rape 2.43mt/ha.

Not quite sure how these latest numbers tally with the last report, seems there are some anomalies, lets wait and see how the next announcement fits.

Wednesday, 6 August 2014

Meet Stan

We don’t talk about Stan often enough so here’s a quick history lesson.

In an effort to control nomadic and pastoral tribes of central Asia, Stalin sat in his Moscow office and drew lines on a map.

These lines became the lands of, or the Stan's of, Kazakhs, Kyrgyz, Tajiks, Turkmen, Uzbeks and Afghans.

Since gaining independence the lines stayed and each country either forged ahead in an effort to create a more open society or desperately and sometimes violently hung on to the mechanisms of their former soviet occupiers.

Actually this is a common issue right across the FSU; ex-soviet countries that despised the occupation but cling on to all the bad bits like monumentally depressing bureaucracy and repressing free expression.

Some of the Stan’s and regions within the Stan’s are mountainous, arid with thin soils and not suited to arable farming but big bits of it are.

Kazakhstan is the sixth largest wheat producer in the world and can produce 27mmt of grain in a good year (2011) or if it doesn't rain, 17mmt as predicted for this year.

So far they have cut 383kha producing 436kmt of grain yielding 1.14mt/ha.

Not a brilliant granted but it’s not difficult to imagine yields increasing through improved plant genetics, investment in equipment, technology and training.

And here's the interesting bit, Kazakhstan has 30 million hectares of arable land.

Ukraine harvest update and other stuff

Ukraine has produced 28.8mmt of grains and oilseeds from 8.7mha.

Dnepropetrovsk, Zaporozhye and Kherson oblasts have completed harvesting early grains and pulses with Kirovograd, Kharkiv, Poltava, Mykolaiv and Odessa oblasts on the final stages.

Crop yields currently stand at wheat, 18.5mmt with an average yield 3.75mt/ha (some record) and barley 7.6mmt averaging 2.93mt/ha.

Wheat quality is said to be similar to last year with bread making grades 1, 2 and 3 accounting for 63% of crop sampled thus far.

Since the start of 14-15MY Ukraine has exported nearly 2.6mmt of grains including 1.0mmt of wheat, 1.1mmt of barley and 360kmt of maize.

After suggesting half a million tonne the Min of Ag is now saying crop losses in Crimea, Donetsk and Luhansk oblasts are not critical but then don’t go on to elaborate what they mean by critical.

As Russian sanctions against Ukrainian agri-products continue to bite there is talk of solving this little conundrum by selling through a third country which goes shows that Belarus does have a use after all.

Ukraine set to harvest a record winter wheat crop

The Director of the Ukrainian Hydrometeorological Centre is saying that this year’s winter wheat crop will break all records.

Not entirely sure what the Hydrometeorological Centre actually is, I'd always assumed it was the weatherman but they issue crop yield predictions so I might have got that wrong.

Either way to say the winter wheat crop will break all records is a big statement considering it doesn't include Crimea or the crop from the conflict zone but does take in to account the harvest is coming to a close.

It's a bit like saying Germany will win this game when they are five nil up against Brazil at halftime, it’s basically in the bag.

He does go on to say that other winter and spring crops are also looking good but high temperatures may adversely affect the yield of maize.

I could do his job.

Tuesday, 5 August 2014

Belarus harvest update

Belarus has harvested 1.735mha or 72% of the planned area.

They have produced nearly 7.0mmt of grains with an average yield of 3.98mt/ha.

They are also reporting that they are on top of next season’s crop with 138kha of land (already) prepared for planting winter oilseed rape which apparently constitutes 33% of the plan.

All this centralised agricultural planning must make the job so much easier for farmers; imagine if your government interfered helped you plan your business, wouldn't you be truly grateful.

Grain exports continue

In the first month of the new marketing year Russia exported 2.8mmt of grains.

That’s an increase of 17.5% compared with the same period last year.

Presumably it’s a case of sell while you still can although long term I can’t see sanctions having any meaningful impact on grain exports from Russia, people have to eat.

Meanwhile in Ukraine sea ports continue to increase grain exports.

According to APK-Inform, last week grain exports increased to 494kmt from the previous weeks 463kmt.

Russia considers banning everything

In a continuation of the tit-for-tat sanction related actions and reactions; Russia is saying it might ban the import of plant growing products from EU countries.

According to Russian officials it's because the European quarantine security system doesn't work.

I suppose they have to produce some tangible reason for each import ban to keep WTO off their case but it is all rather transparent and childish.

At this rate Russia won’t be importing anything at all by Christmas and it’s not that long ago they banned that as well.

Friday, 1 August 2014


On the 17th July a missile was fired at civilian flight MH17 bringing it down inside the conflict region of
eastern Ukraine.

All 298 passengers and flight crew including 80 children on board perished.

I don’t even know where to begin with this.

As a father with young children I am particularly sensitive the images of children’s belongings strewn across the wheat and sunflower fields.

This is a landscape I am very familiar with, I live and work in it, the images on TV might show what looks like another world but it is in fact the same one we all inhabit.

The ground war is dreadful, the indiscriminate bombing of civilians, the confusion, the destruction, the broken shredded bodies, this is not a Ukraine I am familiar with.

Then bodies, body parts, bits of aircraft and private possessions started raining down out of the blue sky on to the innocent villagers living below.

Peasant villagers doing nothing more than anyone of us would be doing under the circumstances, trying to live as best as they could, hoping and praying the distant thunder of guns would pass by without visiting death and misery.

This war is difficult to penetrate to understand what is happening and I’m not going to try and explain it here, what I will say is the downing of MH17 may have shifted the outcome of the war in to its final stages.

How much the shooting down of MH17 has to do with this is speculation but I imagine that bringing the eyes of the world on to this squalid war must have some impact on those who find themselves in de facto charge.

One thing I am fairly certain of, as bodies remain unaccounted for and as the war passes over the wreckage destroying evidence, is it will not be forgotten.

Someone will be held accountable for the crime, be it at the Hague or elsewhere be it next year or within in the next ten.  

This crime will not simply pass.

Russia Ukraine tit-for-tat bans

I have lost track of the tit-for-tat bans surrounding sanctions imposed on Russia but here are few of the headlines I did keep track of this week.

Russia bans dairy imports from Ukraine citing a lack of proper quality control as grounds for the decision.

Russia bans imports of Ukrainian sunflower, soybeans and meal due to contamination with weed seeds from the quarantine list.

Russia bans Polish fruit and vegetables because authorities said the imports had unacceptable levels of pesticide residues and nitrates.

Russia stops Ukraine juice imports "to protect the rights of consumers".

Ukraine bans pork imports from Russia following reports that African Swine Fever virus had appeared in several parts of Russia.

Then dutifully Belarus considers a ban on Ukrainian beef and dairy. 

Where is the WTO in all of this, I’ve not heard a peep out of the toothless quango.

I can’t help thinking it’s farmers who end up paying the price of principle.