Friday, 26 February 2016

Friday roundup of Black Sea agri news

Russia will reduce the area of wheat planted this coming season according to the President of Russian Grain Union, Arkadiy Zlochevskiy.

He cites the introduction of regulatory measures as the reason why farmers will be planting less spring wheat this year suggesting a drop of 1.6% on last year.

He also said the harvested areas of winter crops will be down on last year; nearly 10% of crops are estimated as not in good condition resulting in a potential harvest of 14.8mha against 15.2mha in 2015.

Some Russian farmers I’m talking to are saying they might be looking at winter losses of up to 15% but they won’t know for certain for a couple more weeks.
Ukraine’s cropping season is underway with the Ministry reporting that 2,600ha of early spring grains have already been planted and 1.6mha or 24% of winter grain crops have been fertilised, which to be honest seems high.

It was announced this week that Cargill and Ukraine's M.V. Cargo would build and operate a new grain terminal at Ukraine's Black Sea port of Yuzhny in a $100m joint venture.  The facility is planned to have an annual loading capacity of 5mmt.

This was in the same week Cargill announced they stop selling crop inputs to farmers in the Black Sea region including Russia, Ukraine and Romania as they cut back operations citing to low commodity prices and an inability to realise many of the expected synergies between origination and crop inputs.

Weather forecasts are suggesting mild weather will continue in to March so risk of further winter losses is diminishing but is not entirely over yet snow & ice has melted across much of the Russian grain belt leaving crops exposed if it does turn cold again.

Warm weather has meant that snow has all but gone in Ukraine and much of the Russian grain belt with temperatures currently 10°C above normal.

Winter crops have begun to green-up in south Russia more than five weeks ahead of average while parts of Ukraine's river Dnieper has now opened to navigation three weeks earlier than usual.

The USDA reported that although recent spring-like warmth has not been detrimental to winter wheat, the early development and lack of protective snow cover has left crops more vulnerable than usual to potential incursions of late-winter or early spring bitter cold.

We are now taking subscriptions for our Black Sea Crop Tours.

For less than the price of a dull conference you can gain direct access to the only boots on the ground, fully independent crop assessment and follow all the major commodity crops for the entire growing season from the safety and comfort of your own office.

Wednesday, 24 February 2016

Ukraine's planting season gets underway

Earlier today Ukraine’s Ministry of Agriculture reported that spring planting is officially
underway with 1.7kha in Odessa and 900ha in Mykolaiv in the ground. 

They don't specify what crop but it’s likely spring wheat as spring barley is less frost tolerant and would be best planted later.

The local boys have instigated some recreational top dressing applying fertiliser to 1.6mha of winter grain crops (24% of forecast, 1.6mha in 2015) and 154kha of winter oilseed rape (26% of forecast, 223kha in 2015).

Recreational top dressing is when the workshop is tidied up, everything has been serviced, painted, cleaned, put away or fixed, the shooting season is over so lets go fert spreading, usually way too early.

Winter grain crops for 2016 harvest stand at 7.1mha planted (89% of 2015) including 6.0mha of wheat and 1.0mha barley.

However of that 7.1mha only 6.5mha (92%) has established with 4.3mha (67%) in good condition, 2.2mha (33%) poor and an additional 80kha dead.  Confused?

At the beginning of April last year the ministry put 88% of the crop in good condition while we scored 62% good.

It will be interesting to see how we compare this year, my concern is that even at 67% good they might be overestimating.

Before you say it I know last year was a record harvest but Ukraine gets high yields primarily because it rains at the right time; poor crops still yield in a good season.

But if it is a dry season those poor crops will yield significantly lower, so the proportion of poor crops is the important indicator here.

Only one way to find out, go and have a look for ourselves.

Latest USDA weather update for western FSU

Unsettled, unseasonably warm weather persisted over the region, melting the vestiges of snow cover and accelerating southern wheat out of dormancy.

Precipitation for the week totaled 5 to 30 mm, much of which was rain, over most major growing areas.

As a result, soil moisture reserves remained adequate to abundant for spring growth.

Temperatures for the week averaged 5 to 10°C above normal from northern Ukraine into central Russia, melting the remnants of snow cover and reducing winter crop cold hardiness.

Farther south, temperatures averaged more than 10°C above normal for much of the week from southeastern Ukraine into southern Russia, with daytime highs reaching into the lower and middle 20s (more typical of readings observed in mid- to late-April).

The second consecutive week of abnormal warmth caused winter crops to begin greening-up in the Krasnodar Krai (located in southern-most portions of the Southern District) more than 5 weeks ahead of average.

However, colder air returned to southern Russia toward week’s end, slowing the unseasonably early crop development.

While the recent spring-like warmth has not been detrimental to winter wheat, the early development and lack of protective snow cover has left crops more vulnerable than usual to potential incursions of late-winter or early spring bitter cold.

(We are still seeing snow in Central Russia, albeit slowly melting in warm wet conditions, but it does illustrates how remote reports like this are not always accurate, for that you really need boots on the ground, see our Crop Tour page)

Tuesday, 23 February 2016

Ukraine agriculture less corrupt

Ukraine agriculture has become less corrupt over the last year according to one Vadim Ivchenko, a member of the Parliamentary Committee on Agrarian Policy and Land Relations.

He cites the joint efforts of the Parliamentary Committee and the Agriculture Ministry in promoting an active policy of deregulation that has removed many opportunities for bribes and coercion.

The more cynical might say it’s just window dressing and I suspect even if the intentions to deal with corruption are good, the reality is it probably is a little bit of smoke and mirrors.

But it doesn’t matter; if Ukraine is officially dealing with corruption inasmuch as all the right boxes are ticked then this will allow due diligence to green light corporate governance opening up the possibility of serious levels of  inward investment.

Investments and the business practices that follow mean that everyday corruption is harder to pass off and instead becomes modernised and turns up as things like cash for questions or peerages for donors.

This is the route that Ukraine is trying to follow and appears to be succeeding, to my mind it is only a matter of time until we start to see serious inward investment into the country and some significant social changes taking hold.

Ukraine's Zhytomyr winter crops in good condition

Ukraine’s Minister of Agriculture, Oleksiy Pavlenko, has been on a working visit to Zhytomyr where he discussed the state of the winter crops.

Given this was an official ministerial visit it’s perhaps unsurprising that 100% of planted crop was reported as having emerged with 94% in good or satisfactory condition and only 6% in poor condition.

The minister responded by saying this was a good performance given the prolonged drought and late planting season which indeed it is, if it as actually the case.

It was also reported that 91% of the seeds for spring had been secured along with 67% of fertiliser (which is now being applied, too early in my opinion) and 48% of the plant protection products.

The minister went on to say that these figures suggested the satisfactory state and readiness of farms for spring field work.

Worth mentioning that Zhytomyr translates as rye-world which gives you some idea of what crops grow best there.  

Actually to be fair, south of the oblast is very good farm land but there is a lot of light, free draining land with low rainfall that would suit dry land min-till farming plus it's proximity to Kiev means carrots might do well there.

There you go, a free business plan, min-till wheat, oilseed rape, carrot, parsnip rotation, sell the grains off the combine, wash, grade and pre-pack the roots retail in Kiev, boom.

Monday, 22 February 2016

Monday Black Sea agri-business news

As the UK takes a step closer to leaving the EU with the Prime Minister announcing June 23 as the date for a referendum, Ukraine continues to move closer to integration exporting $4.2bn worth of produce to the EU in 2015 including $1.6bn of cereals and $625m of oilseeds.

UK farmers are in the dark when it comes to what a post EU situation might look like as the UK Ministry of Agriculture are so far refusing to lay out what their plans might be saying that they didn’t instigate the referendum therefore it’s not up to them to explain an exit strategy.

They are now unlikely to change that position given that Cameron has come out in favour of staying in but most UK farmers I have spoken to admit that if the UK exited the EU it’s unlikely they would receive the same level of financial support.

It’s going to be a long run up to the referendum.

SovEcon report that Russian grain exports are expected to remain high in March after record supplies in January and February primarily due to weakening of rouble making Russian wheat competitive.

Cargill announced they will stop selling crop inputs to farmers in the Black Sea region including Russia, Ukraine and Romania as they cut back operations citing to low commodity prices and an inability to realise many of the expected synergies between origination and crop inputs.

They go on to say they will completely exit the market by the end of May, I presume the gap will be picked up by other suppliers but worth keeping an eye on in case farmers find access to chems and fert restricted as a result.

Last week Ukraine’s Ministry of AG reported that 67% (4.2mha) of winter crop are in good condition with 33% (2.1mha) in poor condition.

I’m never entirely sure how they come up with these numbers considering that the satellite showed a third of the country still under snow last week but my feeling is they are probably indicative and that the crop is not looking too good this year.

We will kick off our own Crop Tour in March to check for ourselves.

This week’s Ukraine weather looks to be improving, warmer temperatures has melted ice with virtually no snow cover across the country.

Meanwhile cooler conditions across central Russia means much of the ice and snow is still present and there is still a risk of crop damage.  

Further south daytime temperatures are reaching mid-teens (Celsius) meaning dormancy will be broken and crops will be needing fertiliser fairly soon.

Tuesday, 16 February 2016

Black Sea Crop Tours 2016

Last year we successfully piloted a series of independent crop tours across Ukraine and Russia.

This year we are extending the service to cover key crop stages across the whole of the Ukraine and Russian seasons.

We kick off the year in March with a look at how autumn planted crops fared the winter and what the potential might be for harvest.

We follow this up in May when we will assess planting conditions for corn, sunflower and soya and how they look at the start of their season.

From July we will start to look at the harvest potential of the early crops of wheat and oilseed rape and later, in August corn, sunflower and soya.

We then turn our attentions to the new season crop when we will cover the post-emergence condition of the autumn planted crops in October and how they look before they enter the winter.

In addition to the scheduled tours we will also investigate any significant crop related news reports as they occur through the season such as localised pest infestations or drought.

We will also visit farms to gauge opinion of how their season is progressing.

All tours will be reported in real time through a members Twitter account with photographs, video, comments and observations posted as they happen.

We will use a rapid appraisal technique to condition score as much crop as possible and more a detailed assessments of sample fields looking at growth stages, plant counts, soil condition, pest and diseases and so on.

This entire process will enable us to form a picture of the target crops at key stages through the production cycle and to comment on how this will influence yield outcome.

Full reports will be emailed on completion of each tour.

The individual annual subscription for this service is £650.

By investing in our service you will allow us to continue to develop what we believe is a valuable asset for traders, farmers and other interested groups.

(Company rates and student discounts available, individual reports available, email for details)

Subscription benefits include:
  • Ten scheduled Crop Tour reports
  • Additional reports verifying crop related news reports
  • Access to a members only Twitter account
  • Access to ask direct questions, seek clarification or share opinion
  • Access to all posted pictures, video and commentary
  • Regular bulletins covering points of interest throughout the season
Please register your interest or send questions to

Friday, 12 February 2016

Black Sea agri-business news and comment

From February 15, Russia is introducing temporary restrictions on corn and soybeans from the United States after finding contamination including dry rot in corn and weed seeds in soybeans.

Russia’s food and safety watchdog said they found 64 cases of bacterial contamination in US soybeans including a bacteria which does not exist in Russia.

It’s been a while since I’ve done any meaningful plant pathology but isn’t it conceivable that if you look at any grain consignment from another region you will find bacteria which is not present in your country?

Isn’t that what makes cheese regional?

The Minister of Agriculture says that Russia plans to replace American soybeans with soybeans from Latin American countries.

A cargo train recently completed China-Kazakhstan-Turkmenistan-Iran railway covering 7,908km over nine days.  The route requires two weeks to cover, which is estimated to be around twice as fast as the sea route.

Kazakhstan hopes to use the new railway to up grain exports to Iran and presumably back the other way to China once China starts buying wheat again.

In Ukraine the Minister of Agriculture reported that 2015 investments in agriculture totalled $1 billion and is planned to reach $2 billion in 2016.

Ukraine’s Deputy Minister for European integration said this week that agricultural and high technologies (IT) have the greatest prospects for development saying that many farms in Ukraine are already using technology to optimise costs by reducing fertiliser and fuel.

An oversimplification perhaps but you get the general idea and to be fair the large scale nature of Ukraine agriculture does lend itself to remote sensing, variable application, yield mapping and the like.

Plus I have to say Ukraine Wi-Fi and internet access is brilliant, superfast, free and you don’t need to write your life story to access a cloud that doesn’t work.

Meanwhile here at Crop Tour Towers we are gearing up for our 2016 Crop Tours and it’s already looking to be an interesting season.

South and east Ukraine had a difficult start with autumn dryness delaying germination and a pretty rough winter since with snow melting and leaving crops exposed.  Large parts of Russia are also snow free and unseasonably warm weather is currently softening crops making them vulnerable to any drop in temperature.  Plus where we do have snow we are finding ice encased crops which will start to suffer within the next week.

This year we are planning to run up to ten separate crop tours at key times across Russia and Ukraine kicking off with a post-winter assessment in late March shortly followed up with an assessment of the spring crops post planting.

We will be offering an annual subscription service which gets you access to all the reports through the entire season plus intermittent updates of interest as and when they occur and we will also continue to offer access to individual reports.

As always your support will be greatly appreciated, watch this space for details.

Finally, this weeks “pregnant panda” story goes to Ukraine; while researching the internet using the terms “Ukraine” and “milk” I stumbled across this.

A fed-up woman who had endured a 14-hour business meeting said 'I can't take no more, I want to go home, declare a break!' before spraying her colleagues with breast milk when they ignored her request.

Have a good weekend.

Thursday, 11 February 2016

Black Sea weather forecasts elevate risk of winterkill

Next week’s central Russia weather forecast is showing day time highs of +6C and night time lows of -6C while further south Stavropol is showing +18C by Thursday.

Long term average lows in central Russia can still drop to well below -10C in February and below -5C in Southern Russia.

With that in mind I thought it might be useful to look at the physiology of winter kill in wheat.

Winter mortality can be caused by a number of factors either in isolation or combination and is essentially the air or soil temperature falling below a critical level for a particular cultivar.

In the autumn, crops can be at risk if they are late emerging or the temperature drops suddenly before the plants have had sufficient time to harden off.  This may be an issue in south and east Ukraine this year as dry conditions delayed emergence there.

Plants can succumb to cold induced desiccation when they are exposed to long periods of cold without adequate snow cover.  I don’t believe we have seen any regions this winter that have had exposed plants for long enough but then again it depends on the definition of long enough.  

We have certainly seen plants exposed to cold temperatures in January ahead of snow falling and while it might not have resulted in plant mortality it may have caused leaf death reducing green leaf and yield potential and parts of Ukraine are currently snow free.

Prolonged periods of very low temperatures below -15C will weaken and ultimately kill off plants but we have not experienced conditions like that this winter or for some time now.

Ice encasement can result in plant mortality fairly quickly even if air temperatures don’t get all that low.  Ice freezes the leaves causing intracellular ice to form which ruptures the cell causing mortality.  Furthermore plants can be deprived of oxygen and suffocated.  We are currently seeing conditions like this across parts of central Russia as reported in yesterday’s post.

Then there is mortality caused by alternate freeze thaw action which can cause increased injury from ice crystal growth with each freeze cycle.  This is what we might be looking at in central Russia as we go in to next weeks plus minus scenario.  Further south there is a possibility of freeze thaw damage if temperatures drop to below freezing from the forecast double digits but more likely it will be plants softening off in the warm weather or a combination of both that could cause problems.

To keep this all in context I don’t see an imminent or actual catastrophe but neither do I see a completely problem free situation. 

What the weather does now as we enter that final period of winter will be critical as there are a couple of scenarios that could play out and result in elevated levels of winter kill this year.

Wednesday, 10 February 2016

Russian Ukraine wheat crop at risk

Recent mild temperatures and rain has melted snow cover across central and southern Russia and eastern Ukraine.

As temperatures returned to more seasonal averages this week the melt water, which had pooled and failed to drain through the frozen soil, turned to ice.

Several issues going on here that are worth noting.

Rain on snow is not a good thing, it speeds up thawing but it also collapses the structure reducing air spaces between ice crystals which is what gives snow its insulating property.  A bit like very old loft insulation that has lost its integrity and is now half the thicknesses it was when it went in twenty years ago.  

There is still plenty of snow on the ground but it is thin and less protective should temperatures drop further although more snow is forecast later this week.

Then there is ice which has the real capacity to do some damage.

Melt water and rain collected into low lying depressions and was unable to drain through frozen soil before temperatures dropped and it turned into ice.  

Where snow has melted completely the ice is obvious but we also are finding ice when we dig through the snow. 

Ice that has formed beneath the snow is, perversely, insulated from any rise in temperature and in all probability will be around now until the snow thaws sometime in March.

Ice has a high thermal conductivity and will amplify the effect of low temperature so it doesn’t have to get really cold to start doing some damage.  It also has low gas permeability and, in extreme cases, will smother or suffocate plants by depriving them of oxygen (Poltarev et al., 1992).

Or to put it another way, plants in which are now encased in ice will start to die very soon.

It’s difficult to put the level of risk in to context given that much of the problem is hidden under snow and it is difficult to get out into fields at this time of the year but if pushed we are seeing issues on 10-20% of the fields we visited and across Moscow, Lipetsk, Oryol, Voronezh, Kursk and Belgorod.
At this time we don’t have verifiable information for Ukraine but based on what see near the Russian Ukraine border and anecdotal evidence suggest there is a similar issue in eastern Ukraine.

We won’t be able to fully assess the extent of any damage and yield implications until will carry out our independent Post-Winter Crop Tour of Russia and Ukraine scheduled for late March, subscription details to follow soon.

(Check my Twitter feed for more pictures)

Tuesday, 9 February 2016

Latest USDA weather update for western FSU

Unseasonable warmth rapidly depleted much of the region’s snow cover and reduced winter crop cold hardiness.

Temperatures for the week averaged 5 to 11°C above normal, causing snow to rapidly melt from southern and eastern Ukraine into Russia’s North Caucasus District.

Though winter wheat was now exposed to potential incursions of bitter cold, nighttime low temperatures (-5 to -1°C) were well above the threshold for freeze damage.

While wheat remained dormant in most growing areas, daytime highs approaching 20°C in southern-most portions of Russia reduced crop cold hardiness and may have encouraged early greening.

Despite the widespread warmth, winter grains were still covered by a moderate to deep snowpack (10-25cm) from central Ukraine into Russia’s Volga District.

In addition, light to moderate rain and late-week wet snow (5-30 mm, liquid equivalent) maintained abundant soil moisture reserves for spring growth.

Ukraine looks to irrigation to increase yields

Every so often Ukraine’s Ministry of Agriculture announces plans to rebuild their irrigation infrastructure in order to increase yields.

Then potential investors look at the cost benefit implications and the idea is quietly kicked into the long grass until the next time.

This week the ministry reported that in 2015 Ukraine irrigated 472kha out of a possible 1.7mha of land that could be irrigated (I assume they mean land with immediate access to water) citing the need to upgrade, modernise and invest in irrigation infrastructure.

To address this issue the ministry has launched a strategy (and presumably a committee or two) on the reconstruction and development of irrigation in Ukraine.

Not entirely sure what that all means but given the state of the country’s finances and the huge cost associated with repairing and replacing the canals, pumping stations and other paraphernalia then I guess the main goal will be to secure external funding.

The amount of investment required just to maintain the irrigation infrastructure must run in to many millions of dollars but even if they do convince a development bank or government aid department, is this the right way to go?

The ministry's argument for irrigation is an uplift in yield which is true enough but yield doesn’t equate to profit and the limitations of irrigation and damage that can be done often outweigh the benefit.

Politicians, development consultants and the like see irrigation as a simple solution to increasing yields, one that is easy to contextualise and understand; irrigated grain yield 4.9mt/ha, rainfed 2.5mt/ha (their figures).

But it was recently described to me by someone who has extensive experience of implementing large scale Black Sea region irrigation projects that “you have no idea the size of headache you unleash once you embark on such a task, you need very, very deep pockets”.  I paraphrase but you get the idea.

My advice would be to forget irrigation for now, certainly public sector irrigation projects, instead use development bank funding to undertake proper market based research aimed at improving yields through better crop husbandry.

Unfortunately I don't think politicians find soil management, nozzle selection and counting bugs as sexy as a big pumping station.

Thursday, 4 February 2016

Black Sea weather elevates crop damage risk

The weather in Ukraine and Russia has changed and is quietly threatening overwintered crops.

Mild temperatures and rain has reduced, and in some regions, completely depleted snow cover leaving crops exposed and vulnerable to any drop in temperature.

The picture was taken on the Russian Ukraine border earlier today.

Thing is I’m not reading anything about this in the press so I’m not sure the market will react or if it does it will be “oh yeah, here we go again, storm in a tea cup”.

But as an agronomist what I am seeing makes me concerned for this seasons yields and output bearing in mind that the south and east Ukraine crop was not in the best of condition anyway and much of the FSU has already been exposed to cold with no snow once already this winter.

It is only February and we still have a lot of winter to come until we reach the safety of spring.

We will be conducting another Crop Tour in Late March across Ukraine and Russia (and Kazakhstan if funds allow) to assess the post winter crop condition, only then will we really be able to fully assess the impact of this winter but my feeling thus far is it will be higher than average.

Crop Tour subscription details to follow soon.

Wednesday, 3 February 2016

Latest USDA weather update for western FSU

Snow melted over southern growing areas, while areas farther north remained well insulated from lingering bitter cold.

Widespread light to moderate rain (5-25 mm) melted the shallow snow cover across southern portions of Ukraine and Russia, though exposed winter wheat was not subjected to bitter cold.

Farther north, nighttime lows plunged below -20°C from central and northern Ukraine eastward into Russia, but a moderate to deep snowpack (10-30 cm) kept crops adequately protected from freeze damage.

Despite temperatures averaging up to 5°C below normal in Russia, notably warmer weather (up to 7°C above normal) over Belarus and western Ukraine was advancing eastward at week’s end.