Thursday, 5 December 2013

Farming through a revolution

"What do you want to do today kids, swimming, play park or do you want to go to the revolution?"

Not the normal Saturday morning family breakfast time negotiation but it is what I found myself saying last weekend.

Ukraine hit the headlines this week as a demonstration turned in to civil unrest and then an attempt to replace the government.

The spark was an abrupt about face by the Ukrainian government signing an EU Association Agreement that would have paved the way to closer EU integration and arguably social and economic improvements. 

Instead Ukraine chose to sign a free trade agreement with Russia much to the obvious delight of Vladimir Putin who basked in the afterglow of sticking one up the EU.

It didn’t last long.  Demonstrators quickly took to the streets in Kiev and other towns to show their frustration at seemingly another lost opportunity for Ukraine.

In Kiev crowds gathered around the location of the previous revolution and early on Saturday morning when you had the feeling the whole thing would peter out in the cold winter, special forces stormed the site and started beating people bloody with batons, boots and fists.

This had the effect you might imagine, people went nuts, by Saturday evening massive crowds had gathered, there were running street battles, at one point they tried to topple Lenin’s statue, social media was buzzing with evidence of state sanctioned violence, the worlds leaders condemned the actions, barricades were erected and it all started to get a bit serious.

On Monday the government avoided a vote of no confidence then seemed to grow in confidence and started demanding the demonstrators disbanded and vacate city hall they had taken over as an impromptu headquarters.

As I write the situation appears calm but you do have the feeling that it could gain traction and go one of several ways.

In the meantime I have been acting like an unofficial journo as media groups contacted me (me!) looking for eyewitness reports from the front lines, which I duly obliged.

Is this affecting farming?  Not at the moment, all winter crops are currently entering dormancy as the temperatures drop, this morning saw the first bit of proper snow of the season and harvest is officially all but done and breaking records.  Exports might slow up if events turn in to wider actions such as national strikes but at this moment I don’t see anything that suggests beyond the main cities it’s anything other than keep calm and carry on.

I’m proud to say we unanimously chose to attend the revolution and the kids loved it.

Thursday, 26 September 2013

Wet wet wet

Its been raining and the ground is soaking wet.

Oilseed rape planted in to dry conditions earlier this month will appreciate the drink but the cold weather (I wore a hat today) will mean the plants can not really take full advantage.

Winter wheat plantings in Ukraine and Russia are now behind schedule so much so that commentators are writing about a shortage of wheat for 2014.

My contacts are all a little less negative; it is wet and machines are not moving at present but given a dry'ish October then they should catch up.

The more immediate impact of the rain is those business relying on dry conditions to cut sunflowers and soya will incur additional drying costs and more significantly, delays in harvesting corn as they wait for driers to clear the backlog.

Ukraine is about to sign an association agreement with the EU which essentially is a step towards Europe.

Putin is furious and the rhetoric is becoming increasingly aggressive, Russia will likely retaliate the only way it knows how by increasing gas prices.

Crop prices have dropped 40% in the last month.

Corn which was fairly stable all year has dropped from around €170/mt to €100/mt; prices haven't been this low since 2009-10 season and there is a feeling it may go lower still.

Wet crop, high gas prices, low crop prices, record areas of crop, high volumes, no additional drying infrastructure.

It's all starting to look like a bit like a perfect storm.

China in your hand

This week China announced they had had reached an agreement with Ukraine to buy 3 million hectares of prime farmland in Dnipropetrovsk.

After much discussion as to what a hectare is the press went to town trying to contextualize 3 million.

Apparently it's about the size of Belgium, Armenia or Massachusetts and is 11,583 square miles or 9% of Ukraine's arable farm land.

I haven't checked any of these comparisons because I couldn't be bothered so don't email me if they are wrong.

However this was quickly followed up with a Refutation of Information statement from Ukraine saying it had all been a big misunderstanding and what they had actually agreed to was an investigation to cooperate in a 3 thousand hectare drip irrigation project.  

3 thousand hectares is about 11.5 square miles or the size of Slough.

Despite back tracking the intention still holds true that many country's, China included, recognise Ukraine as an important provider of food security so expect more of these announcements in the future and expect some of them to eventually stick.

It also holds true that Ukraine is one bastard of a place to do business.

Wednesday, 21 August 2013

USDA weekly weather bulletin August 20

Scattered showers (5-25 mm or more) and seasonably warm weather in the Baltics, Belarus, western Ukraine, and the western Central District in Russia continued to benefit immature spring grains and summer crops. 

Elsewhere, hot, mostly dry weather in eastern Ukraine, the Southern District in Russia, and southern and eastern portions of the Volga District in Russia hastened crop development and amplified evaporative losses, aiding small grain maturation and harvesting but increasing stress on immature summer crops. 

Temperatures in these latter regions averaged 3 to 6°C above normal, with daily maximum temperatures routinely in the lower to middle 30s degrees C.

Drier-than-normal July weather accelerated the harvesting of winter grains and oilseeds from northern Ukraine into western and southern Russia. 

Meanwhile, spotty showers in central and eastern Ukraine provided some soil moisture for reproductive summer crops, although a lack of stressful heat maintained overall favorable corn and sunflower yield prospects. 

Tuesday, 20 August 2013

Harvest and planting update

Weather conditions have generally been kind for oilseed rape and wheat harvest with both crops now all but finished.

Oilseed rape gross yields are reported somewhere around 2.3mt/ha, similar to last year.

According to ministry 61,000 hectares or 7% of the forecast 924,000 hectares of winter oilseed rape has already been planted. 

My records suggest that’s a slight decrease on last years planted are but we still have a three week planting window to go.

Current local spot price for oilseed rape is a paltry 3,100uah/mt (382usd/mt); this time last year oilseed rape was selling at a more respectable 4,400uah/mt (541usd/mt).

Wheat yields are up on 2012 with the ministry of agriculture’s current official estimate hovering around 3.4mt/ha (last year it was 2.9mt/ha).

Local spot price for 3rd class wheat is 1,200uah (148usd/mt) compared to 1,700uah/mt (210usd/mt) at the same time last year.

Corn is looking good at the moment with this season’s weather playing a big role in helping the crop germinate, grow and pollinate well.  A recent cool spell coincided with corn pollination which helped seed set. 

Current estimations are pegging corn at 5.95mt/ha although the feeling is the price will be low.

Sunflower harvest is away in the south with early yields coming in a smidge over 1.0mt/ha.

Soya is looking good as it generally does at this time of year and early predictions are for a reasonable crop but who make money on soya in Ukraine?

Tuesday, 13 August 2013

The problem with Ukraine is...

Ukraine has land, lots of it; 32 million hectares of large flat arable fields.

Ukraine has a great climate; an intense growing season that turns the country from drab winter greys to a vibrant green jungle inside of a week and allows all the major commodities to flourish.

Ukraine has soil; deep, fertile, easily worked stuff, even the Nazis, not best known for their agronomy skills, recognised the potential, shovelled it in to wagons and carted it back to Berlin.

Ukraine is perfectly located to market; 400m next door in soon to be annexed Europe, 140m in the former colony Russia and a further 500m hungry souls just though the Bosporus in the Mediterranean and North African countries.

So why does Ukraine's agricultural productivity not reach the much hyped potential?

I could write a thesis on the subject but today I am going to pick specifically on contractors.

There aren't any.  At least not any that behave like contractors.  There are farmers and chancers that portray themselves as contractors but in reality no contractors.

Take one contractor I use for example - I'll call him Sergey.

Sergey has no problem turning up late; not turning up at all; turning up with discs that have discs missing leaving an uncultivated strip running down the middle and doesn't see why this is a problem; cultivating too shallow so he can speed through the hectares; stealing diesel; stealing fertiliser; overcharging; making up invoices; charging twice for the same job; all in all just being an out and out dick.

Before you ask why use him, the others are the same but turn up drunk.

There is a huge opportunity for young budding entrepreneurs to establish a contracting business here in Ukraine, providing a normal standard and normal quality of service to established large farming entities.

Many, me included are looking to fund capex and outsourcing machinery services in partnership with a proper contractor is a very real option.

To my mind initiatives like this will lead to increased productivity and improved profitability and the likes of Sergey will go the way of the dinosaurs.

Forced to eat his own defecate as he runs out of food.

Monday, 15 July 2013

Harvest update

Current Ukraine harvest reports for small grain and oilseed rape are putting yields more than 30% up
on last year. 

Initial harvest results are from southern Ukraine regions with the bulk harvest yet to get underway further north.

Higher than average rainfall in southern Ukraine will have played a big part in those high yields.

The question will be how high these figures are maintained as harvest progresses in to areas that have received average rainfall figures.

Thursday, 11 July 2013

Ukraine and Russia harvest gets underway

Harvest 2013 is up and running and initial indications are that its going to be big.

Ukraine Ministry of Agrarian Policy are currently pegging rapeseed at 2.0mt/ha, spring barley at 1.5mt/ha, winter barley at 2.7mt/ha, winter wheat at 2.9mt/ha and rye at 2.4mt/ha.

Total grains and pulses are quoted 2.68mt/ha which is up 36% on same time last year.

Across the border, Russia are quoting rapeseed at 1.7mt/ha, barley at 4.4mt/ha (really?) and wheat at 3.5mt/ha. 

Total grains are 3.56mt/ha which is up 26% on same time last year.

As always I would season these figures with plenty of salt but it does look to be true that so far 2013 crops are performing better than 2012.

Although weather does more to meddle with yield figures than mere human intervention the general condition of crops is improving year on year. 

You never used to see tramlines, you do now.

As each season goes the level of knowledge, experience and technology is improving but then again so it should be, this is 2013 after all. 

But before I run away with the idea all is rosy in the workers paradise let's be honest, three ton of wheat is not all that when the rest of Europe pushes six.

The report card reads "Yuri and Dmitri are working hard but they could do better...much better."

And when they do...

Sunday, 19 May 2013

Ukraine and Russia crop and weather update

Reports of improved chances of rain in the FSU came true this week as light to moderate rain fell in parts of western Ukraine.

Eastern Ukraine and Russia remained dry with farmers in the regions telling me winter wheat is now in ear and starting to show visible signs of drought stress.

Substantial rains expected for Russia's southern district will help newly planted maize and sunflowers but will have a limited effect on these crops approaching the reproductive phase.

Talking of rape, it might just be me but all the stuff I have seen between Lviv in the west and Chernigov in the north looks a bit sickly.

Like that pale, runty kid who shuffled about at school perpetually sniffling and dribbling in to a snot rag.  It's all there just a bit weedy looking.

I'm putting it down to plants running out of steam in the longer than usual winter and it's taking longer than usual to bounce back.

The problem now is that the time left to bounce back is getting less with every day so the bounce will not be as high as we would have hoped.  I am anticipating a yield penalty.

Although corn and sunflower plantings have picked up the pace the Ministry of Agrarian Policy might be jumping the gun when they reported this week that 4.6min ha of maize (97% of the plan), 3.9min ha of sunflowers (99% of the plan) and 1.25min ha of soya (87%) had been planted.

Which for no reason at all reminds me of the story about the talented soviet aircraft designer Oleg Antanov who when looking to reduce weight on one of his aircraft designs decided not unreasonably to replace the four stroke back up generator with a lighter two stroke version.

When party officials got wind of this they told comrade Antanov that the step from four stroke to two stroke was too radical and revolutionary and insisted he used a three stroke engine instead!

Monday, 6 May 2013

Ukraine spring crops update

May and summer is well and truly here. 

The season went from deep winter to summer completely bypassing spring all in the space of a couple of weeks.

The end of March saw the mercury at minus 20 Celsius yet by the end of the April daytime highs were just short of 30 Celsius. 

Minus 20 to plus 29 in 30 days.  No wonder the roads are crap.

The meter deep snow that was present in April rapidly disappeared and slide off through the soil profile never to be seen again.

Field work started by the second week of April with planting underway by the third.

By the first week of May analysts started ringing the alarm bells that the ensuing drought was going to harm Ukraine's previously (like two weeks previously) forecasted record yields and unless it rained quickly famine was sure to follow.

Yet a quick look at the met data shows rainfall and soil moisture at or above the average so go figure.

On the ground no one is complaining of dry conditions just yet - apart from those in the East and South but they all ways do so there's no news there.

Winter conditions even with the late start have been favourable and most crops survived with negligible levels of winter kill; which means there isn't going to be a big upswing in spring planted crops particularly export friendly corn and barley.

Clear weather ahead means corn, sunflower and soya plantings are rapidly catching up, no doubt we will need some rain soon but it usually arrives at some point.

Prices have been buoyant of late with all the major commodities fetching prices at or very near to five year highs.  Is this the year farmers make money?

The Ukrainian China trade deal has started to take effect with local administrations now tasked with the job of sourcing 5mmt of corn to send to China by the end of the year.  The deal is the Ukrainian government will pay the farmer 700uah/mt (that's about €66 but likely to be a lot less once the hryvna devalues which is expected any time soon) and the balance based on the market value at delivery. 

No specific mention of when that balance will actually be paid.

The fertiliser supply chain issues seems to have righted itself just in the nick of time with fertiliser now turning up on farms as its being spread.

In summary, crops are looking good, summer is here, roads are still crap!

As another season gets underway I wish good luck to all farmers and use the quote that once in your life you need a doctor, a lawyer, a policeman and a preacher but everyday, three times a day you need a farmer.

Thursday, 28 March 2013

Ukraine winter crops update

There has been a lot of snow over the last two weeks; two big snow storms hit the country stopping anything moving or much happening. 

It must have been big because even Kiev went in to lock down with reports of miles of abandoned lorries and cars blocking the streets.

One of my guys was unfortunate to be in that traffic and spent 14 hours trying to leave Kiev.  He said it was like a scene from a zombie movie with people wandering around randomly parked vehicles looking for help.

It might have been a lot of snow in a very short period of time but selling off all the snow ploughs and snow clearing equipment didn't help matters.

Our local administration demanded I gave him diesel to fuel a snow plough which turned out to be a converted tank as mysteriously his snow ploughs had all disappeared. Maybe under the snow.  

What's the impact on crops?  They should be OK but this winter is going on a long time and there is still a lot of snow sitting on top of the crops.

Official figures put 92% of winter crops in good to satisfactory condition.  All I see when I look is whitey white whiteness.

I'm sure the snow will eventually go, once it does I suspect we will see a higher than normal incidence of typhula in wheat and rape and oilseed crops that did not receive an autumn fungicide (pretty much everything) will see more plants die because of light leaf spot and phoma which will be incorrectly attributed to winter kill.

As snow melts it will make for very wet and cold soils, getting on with spring field work will be a challenge and spring plantings will be late.

All of this is compounded by the normal issues in Ukraine the main one being nitrogen fertiliser supply.  Delivery is being quoted around 60 days which puts it on farm end of May. 

Official figures suggest farms are in a good position with 40% of spring fertiliser paid for.  What they fail to mention is how much of that has been delivered?

One final thought, how does the guy who drives the snow plough get to work in the morning?

Friday, 18 January 2013

Chinese Ukrainian agricultural cooperation

I've seen plenty of Chinese delegations whizzing in and out of Kyiv's top hotels over the last couple of years and it seems to be paying dividends.

Trade between the two countries now exceeds 10 billion usd.

China, the worlds largest consumer of corn is planning to buy 3.0mmt annually over the coming years. 

Well done Ukraine for securing a major buyer.

Seemingly China sees Ukraine as a strategically important partner in securing food supplies and has provided a 3 billion usd loan to help bring the countries farming up to scratch. 

I suspect the bulk of this wont end up anywhere near a farm and what does will be carved up by various agencies trying get a slice of the action.

Although 3 billion usd is not to be sniffed at, to keep it in context I estimate Ukraine needs about 50 billion usd in to farming alone plus further significant investment in agricultural education to update the workforce plus a large cash injection to improve research, plant breeding and animal genetics plus a further huge amount for infrastructure, transports, drying and storage and if there's anything left over something to rebrand Ukraine as an international food producer. 

Each journey starts with the first step.

Tuesday, 15 January 2013

It's been snowing in England...

...and the BBC react as if it's the end of the world; cold weather warnings; ice warnings; how to drive in the snow; band of snow heads across the UK and those ubiquitous saccharine photos of snow covered Robins and Cathedrals.

Snow.  It's white. Its cold. It comes every winter to vast regions of the world. Millions of people live with it, sometimes people die of it, it looks nice because it covers up all the crap, it fills in the potholes making driving slightly more pleasurable if not slightly more dangerous. 

It's snow, it's not news unless it's a problem, man up BBC and get back to the job of reporting and not churning out pointless tosh.

Here's a photo of snow.

Monday, 14 January 2013

Ukraine to Canada

There are a lot of similarities between Ukraine and Canada, not least they are both massive and driving around is a test of endurance. 

The climate is not too different and the farming could learn a thing or two from each other.

My new pal Brian has a Farm Consultancy  business (Prairie Farm Consulting) in Canada on the Saskatchewan Manitoba border helping farmers manage their business by working out the true cost of production. 

Essential but often tedious when stuff needs to be done outside.

Check out the link for a full list of services and see if he can help you.

Ukraine increasing agricultural exports

Ukraine increased agricultural exports by nearly 40% in 2012 to 17 billion usd.

This included meat, fish, dairy, poultry, vegetables, veg oil, sugar, wine, nuts and apples as well as 6.7mmt of wheat.

Export destinations included the EU and CIS with Austria having a taste for Ukrainian apples; Poland unsurprisingly buying rye; Egypt and Spain are the largest buyers of Ukrainian wheat and Saudi Arabia taking three quarters of Ukrainian barley (I wonder what they do with that?).

Other interesting statistics from 2011 worth noting are Ukraine is still the top barley exporter (I think that might change this year); is the third largest maize supplier (second to US and Argentina); is the worlds largest sunflower exporter; is the fourth largest potato producer and is the worlds fifth largest walnut producer.

Russian 2012 grain crop update

The Russian Ministry of Agriculture peg the 2012 grain crop at 70.7mmt, down 25% from 94.2mmt a year ago.  They also suggest that quality might be up with 4.6% larger portion of milling wheat than in 2011.

Wednesday, 9 January 2013

Black sea crop condition

Official and unofficial crop condition reports from Ukraine are bullish with 90% plus of winter grains in the good to excellent category. 

Autumn rains helped establishment and those crops are now by and large safely tucked up under a blanket of snow.

A different situation is emerging further east in Russia. 

A recent and rapid drop in temperature has coincided with no snow cover in several grain growing regions. 

Low temperatures with little in the way of protective snow will result in higher than normal plant death and a corresponding drop in yield.

So in a nutshell; Ukraine is set for a bumper 2013 harvest and Russia is set for a catastrophic 2013 harvest.

But it is only January and there is a lot of season yet to go.