There are many ways to gauge growing conditions, estimate yields, and measure exports from overseas, but likely one of the best ways to get a grip on crop production in a foreign land is to ask someone who’s there.
Mike Lee, with Green Square Agro Consulting, is an agronomist and crop consultant based in the Black Sea region, covering Russia, Ukraine, Belarus, and Kazakhstan. RealAg Radio host Shaun Haney caught up with Lee to talk about the Russian and Ukraine wheat crop yield estimates, land prices, profitability, and government support.
Lee, known as @AgronomyUkraine on Twitter, shares that Ukraine’s wheat production is perhaps down about 2 million tonnes from last year, which is still a top yield. Yields in south and central regions of Russia, where exports largely originate, has been reasonably good, Lee says, with the Volga region in the east just now getting harvest underway.
While yields may be slightly below what was estimated earlier in the year, Lee cautions that last year’s monster of a wheat crop set the bar a little too high. This year’s estimated 68 million tonnes is historically a really good crop, and one that may actually top 70 million tonnes when the last of the harvest rolls in. (Story continues below)
Moving on from wheat yields, Haney asks about the business side of farming in the Black Sea region. Lee says there’s certainly a lot of smoke and mirrors when trying to determine profitability in agri-businesses as most are vertically integrated, turning corn into meat, milk, and eggs. “They’re likely profitable, but is grain farming profitable? It’s difficult to ascertain,” he says.
There are production similarities between Russia/Ukraine, the UK and parts of Canada, he says. Input costs are comparable with Western Europe, perhaps a little lower. Labour is certainly lower, but the biggest difference is land values — in the UK, land could sell for 20,000 pounds per hectare vs land in Ukraine/Russia selling for $1,000 per hectare (it’s not an apples to apples comparison, but the difference is huge, he says).
Even though there are mega-farms covering from 100,000 to even 500,000 hectares, there are plenty of privately-owned 2,000-5,000 hectare farms, as well. And many farmers and farm companies are looking at decreasing their cost of production by moving to min-till or direct till which should improve profitability.
There’s certainly vocal support for farmers in Russia by its government, Lee says, but over the last five to six years he’s seen government pull back from the daily business of farmers, and that’s been a welcome change.
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