Wednesday, 30 April 2014

Brief update from the FSU

Belarus has officially completed planting maize with 231kha in the ground, declared the Ministry of Agriculture and Food of Belarus.

They also went on to say that 33kha (32% of the plan) of spring rapeseed has been planted.

My contacts in Russia are telling me all crops are looking very good there and planting is well on schedule although April has been dry in parts and they could do with some rain now please.

I hesitate to mention buckwheat, a staple food item in these parts, because when I mentioned it last time for some inexplicable reason the hits on my blog went through the roof and I was inundated with emails but here goes. 

During the first 8 months of 13/14 MY Russia exported a record 27kmt of buckwheat compared to 8kmt the previous year and 2.5kmt the year before that.  Ukraine is the main export market with 14kmt delivered so far this MY.  I guess Ukraine will be looking to up its buckwheat planting for this year because I assume that source will no longer be available.

Ukraine’s Ministry of Ag is preparing an Agrarian Code of Ukraine to come in to force by 2015 and will annul competing laws.  Let’s hope they don’t turn to their new pals in Brussels for advice on putting together a common agricultural policy because we all know how well that works.

Further developments from Ukraine’s mad busy Ministry of Ag is to decentralize agricultural control suggesting they will cancel excessive controls and delegate responsibility to the regions.  That could be a double edged sword depending who is in charge of the regions.

At the same time the Government has announced they will reduce the number of taxes in the new version of the Tax Code to 8 in attempt to simplify the tax procedure and reduce the possibility for tax evasion.

On the face of it all these changes to legislation and business practice seem sensible and will make the business environment easier for investors which is what Ukraine desperately needs.

Farming in Ukraine continues despite the threat of war

Here is a copy of my latest blog for informative and useful Farmers Review website.

While a full on war hasn't quite broken out the situation in eastern Ukraine continues to teeter on the brink of something tense but no one seems quite sure what.

Various official buildings and offices are being taken over by pro-Russian, pro-separatist groups who rally around a single issue agenda of self-rule and have a general distrust of the interim Government in Kiev.

Shots have been fired with several deaths reported, journalists have been kidnapped, so too have international military observers (whatever they are), some bodies have turned up with signs of torture and pro-Ukraine and pro-Russia groups are clashing on the streets with bloody results.

Recently the mayor of Kharkiv was shot and is now in critical condition in what appeared to be an assassination attempt aimed at  the situation further.

Russia is widely thought to be behind the separatists or at least the former disgraced Ukrainian President in exile in Russia where he ran to with $32 billion which he is now using to fund the separatists but as yet no one has been able to produce conclusive proof that Russia is directly involved.

I’m sure they are but only in the same way the US is directly involved supporting the other side.

That’s the problem with geo-politics, you never have the full picture and it’s very easy to run to simplistic conclusions about who are the goodies and who are the baddies.

On a positive note events haven’t yet spiraled out of control and I assume the longer it goes on the less likely it is for the situation to break down completely.
But then again I’m a farmer not a strategic analyst so don’t blame me if I get it wrong.

On a further positive note there has been a series of rapid fire announcements coming from the Ministry of Agriculture in Kiev all seemingly sensible and geared towards making business easier, more transparent and aimed at encouraging investment in to the sector.

Some of the initiatives include EU trade preferences for Ukrainian exporters; the introduction of minimum term on agricultural land leases; deregulation of the market for pesticides; cancelled grain and granary certification; develop organic production and exports; National Bank provided lending support and a simplified procedure of agricultural land allocation.

I get the impression that the new Government, which boasts the highest ever share of top and mid-level government officials with western degrees and international business experience are actually trying to do something sensible and effective.

Recent rain in central and western regions helped the over-wintered crops and newly planted spring crops and they are looking very good at the moment.  Crops further east are starting to show signs of stress from a lack of water.

Winter wheat is around GS30-32 (pseudo stem erect, 2nd node detectable) and winter oilseed rape is at early to mid-flower.

The season is about twenty days earlier than last year which will have the effect of increasing the yield potential for all crops assuming the season ahead is conducive to growing.  However any yield potential will be restricted by a lack of finance, inflation, exchange rate fluctuations and general uncertainty which will discourage a high level of investment in to this year’s crop, particularly fertiliser.

Gas prices going up (Russia supplies Ukraine with gas) will make grain drying expensive so I anticipate a drop in maize planting to be replaced with sunflower or even fallow.  We are about half way through sunflower planting and about a third of the maize crop is now in the ground.

Crop prices have moved upwards on the back of the continued uncertainty in Ukraine and cold weather in the US which is good news if you still have crop to sell.

The farming clock keeps turning regardless of what Putin, Obama and the rest get up to.

Tuesday, 29 April 2014

Latest USDA weather update

Volume 101, No. 17, full report available here.

Warm, wet weather in western portions of the region contrasted with mostly sunny skies in the east. 

Moisture associated with a slow-moving storm system over the Black Sea produced showers and thunderstorms (2-25 mm) across Ukraine, Belarus, and southern Russia, with a heavier band of rain (25-70 mm) embedded over central and northwestern Ukraine.

The rainfall improved soil moisture for vegetative winter wheat and conditioned fields for planting of small grains, corn, and sunflowers.

Dry weather across central Russia maintained a rapid pace of fieldwork, including planting of spring grains and summer crops.

A warm southerly flow persisted, allowing daytime highs to push into the lower and middle 20s (degrees C) across much of the region. 

However, colder weather arrived at week’s end, with readings in northern portions of the Southern District reaching -5°C, possibly causing some localized burnback of more advanced winter wheat. 

Friday, 25 April 2014

Amid tension in Ukraine, positive change sought for farmers

Here is a copy of an article I'm quoted in posted by the editor of Grainews Lisa Guenther.

As seeding progresses in Ukraine, farmers are eyeing input prices, markets and weather, just as their counterparts do in other parts of the world.  But Ukraine’s farmers have the added worry of whether conflict in the eastern part of the country will boil over.

Last week Russian and Ukrainian officials signed an accord agreeing to back away from further violence and calling for demonstrators to leave public buildings in eastern Ukraine.  But three pro-Russia separatists were slain in a shootout in the eastern city of Slavyansk over the weekend, and the bodies of two people allegedly abducted by pro-Russian activists were discovered Tuesday.  Ukraine forces on Thursday reportedly killed up to five pro-Moscowseparatists.

Both sides lay blame for the violence on the other’s doorstep; Russian President Vladimir Putin most recently warned of “consequences” if Kiev used its army against its own people.  The U.S. is now deploying NATO troops to Eastern Europe.

Mike Lee, an agribusiness consultant based in the western Ukraine city of Lviv, said the conflicts have polarized people.  Lee is originally from the United Kingdom but he’s also worked in Kazakhstan, Uzbekistan and Russia.  He now works with private investors setting up farms in Ukraine.

It’s difficult to know whether Russia is stirring up trouble in eastern Ukraine, or whether the separatists are local people unsure about legislators in Kiev, he said.

“In all conflicts, the first casualty is the truth, and it’s very difficult to actually find out what’s going on. Time will tell, I suppose,” said Lee.

Crop season already difficult

Lee said Lviv is quiet right now but the conflict in the east is affecting agricultural production throughout Ukraine.  “I do see the inflation and exchange rate having a big impact on an already difficult season.” [Related story]

Commodity prices collapsed after the 2013 harvest, Lee said.  “That collapse has made a big hole in everybody’s cash position.  And cash is king.”

Ukraine’s planting season is 20 days ahead of what it was last year.  There’s an urgency to get the crop in the ground, but Lee said he thinks “people are struggling.”

Lee expects to see more land left fallow and less corn in the ground this spring.

“The last three years I’ve had my suppliers on the phone at this time of year screaming at me that supplies of (maize) seeds have run down,” he said.

But the phones have been quiet this year, he said.  “So that tells me that there’s a surplus of maize seed to go in the ground.”

Gas prices are also climbing, which will turn maize drying from a costly exercise to a “prohibitively costly exercise,” said Lee.

Fertilizer is available, although it’s more expensive.  How much fertilizer will be applied to seeded acres is a question mark, Lee said.

On the positive side, Ukraine has been getting much-needed rain recently.  Spring cereals and rapeseed have been planted and maize planting is gaining momentum, Lee said.

“If we don’t get a wash-out through the rest of this month, into next month, I could see crops going into the ground in good time, in good fashion,” said Lee.

“How they perform after that with the amount of fertilizer that may or may not be applied, we’ll see.”

Longer-term view in ag

Lee said there is a group of legislators in Kiev who are “trying to bring in sensible changes to legislation.”

For example, the Ukraine government recently announced land leases would be extended “which on the face of it is a good thing because it encourages a bit more of a longer-term view, which is what agriculture needs,” said Lee.

There is a moratorium on selling agricultural land in Ukraine.  Lee said expectations that the government will eventually lift the moratorium have created a culture of short-term rental agreements “where landlords are looking to have a short lease because they want to be able to sell at the first opportunity.”

Renters have first refusal for extending lease agreements or land sales once they’ve started renting a chunk of land, said Lee.  But renters “find it difficult to invest long-term in the land because leases are relatively short.”

A working group with Ukraine’s Ministry of Agrarian Policy and Food is also considering loosening regulations around importing plant protection products by moving to a licensing system, a move Lee said could significantly boost wheat yields in years rather than decades.

Right now Ukrainian farmers can’t pick up the latest chemicals that are available to their Western European counterparts, Lee said.  Generic chemicals are also available from third-party suppliers, but Lee said farmers who buy from them run the risk of buying adulterated products.

“So while there is a range of chemicals to use, it isn't the sort of full armoury that we can go at, I presume, because there isn't a big enough demand to bring in some of those more expensive chemicals,” said Lee.

“And the legislation and the process are so cumbersome and expensive that it’s not worthwhile.”

Lee said changing the legislation would “open up the market to allow the import of a wider range of chemicals into Ukraine.”

Other changes planned, or recently made, to Ukraine’s ag policy and legislation include cancelling grain and granary certification, developing the organic industry for export to the European Union, new lending support through the National Bank, simplifying agricultural land allocation, and renewing the Deputy Prime Minister position of the agrarian complex.

Lisa Guenther is a field editor for Grainews at Livelong, Sask.  Follow her at @LtoG on Twitter.

Mike Lee blogs about farming in Ukraine; you can also follow him on Twitter at@AgronomyUkraine

Friday, 18 April 2014

Ukraine crop update

Winter oilseed rape starting to flower as nitrogen, sunshine and warmer weather have taken effect.

There has been a no significant winter kill so almost all plants have survived giving some pretty decent if not slightly thick plant stands.

Recent cool temperatures slowed growth down a little which might not be a bad thing but caused no damage.

Although it is a long way to go before harvest the crop at this stage looks very good.

Winter wheat is in good condition and now at GS30-31 (pseudo stem erect, 1st node detectable) which is what I think they call jointing in the US.

Call me fussy but I do like the simplicity and accuracy of the decimal code growth stage system, makes perfect sense to me.

While I’m at it all decimal makes sense; kilograms or litres per hectare are easily divisible, how on earth do you calculate half rate of 3 pints per acre then decide how much to put in the tank?

And what is a bushel all about?

Soil temperatures are now warm enough for sunflower planting to be well underway with corn and soya getting started further south.

Wishing you and Ukraine a peaceful Easter.

Thursday, 17 April 2014

Crop monitoring in Europe

MARS Bulletin Vol. 22 No. 4 (2014), you can find this and previous reports here.

If you’re not familiar with the Monitoring of Agriculture with Remote Sensing (MARS) project, it started in 1988 and was designed to use space technologies to provide independent, timely information on crop areas and yields.

It is a brilliant EU project but I can’t help thinking it would be added to if you had confirmation reports from boots on the ground agronomists.  

Like, for example, me.

The summary is that well-advanced winter crops would now welcome rain.  Winter crops are strongly advanced from western to eastern Europe, positive biomass accumulation in the Mediterranean countries with unfavourable canopy development in eastern Ukraine and central Turkey.

Here’s what the latest MARS bulletin has to say about Ukraine.

The map displays the differences between the fraction of Absorbed Photosynthetically Active Radiation (fAPAR) observed during the period 21-31 March 2014 and the long-term average (LTA, 1998-2012) for the same period.  Essentially how developed the crop canopy is.

In Ukraine, persistent warm temperatures determined high crop growth rates during March.

In central regions (e.g. Poltavs’ka), increased crop demands for water are not met due to the large precipitation deficit built up over the past months.

Exceptionally dry conditions may affect crop growth.

After a mild and dry winter, March also remained milder than usual, and rainfall was sparse.

The exceptionally dry conditions in central Ukraine may affect yields of winter cereals.

Winter wheat yield forecasts are below the 5-year average.

Meteorological conditions in March followed the tendency observed during this winter.

Average temperatures remained milder than usual, from 3°C above average in eastern regions to 5°C in north-western regions.

Rainfall remained far below the average, and the six-month period October-March is one of the driest recorded in our database.

The driest conditions were observed in central regions (Cherkas’ka, Kirovohrads’ka, Mykolayivs’ka) which received 50% of the average cumulated rainfall from October to March, and 40% of the average cumulated rainfall since 1 March.

According to our model, winter crop development is 20 days in advance compared to an average year, which implies that leaf area and crop water demand are also unusually high for this time of the year.

Biomass accumulation of winter cereals will be negatively affected unless soil water levels are significantly replenished.

The emergence of spring crops may also be impacted by these exceptionally dry conditions.

Wednesday, 16 April 2014

Are we seeing the first real shoots of growth in Ukraine?

As Ukraine appears to teeter on the brink of civil war and uncertainty it’s worth noting that this month alone the following announcements and changes to agricultural related legislation and policy have been made.
I'm no expert and I have yet to study the detail but on the face of it they all seem positive, sensible and for the general good.

I get the impression there are lot of people working away in the background trying to effect real change for the nation; may be this is what the revolution was really all about.

  • EU trade preferences for Ukrainian exporters come into force;
  • Ukraine to introduce the minimum term on the agricultural land lease;
  • Ukraine: Ministry of Agrarian Policy to deregulate the market of plant protecting agents;
  • Ukraine canceled grain and granary certification;
  • Ukraine to develop organic commodities production and exports to the EU;
  • Ukraine: National Bank provided a new way for lending support;
  • Ukraine: position of the Deputy Prime-Minister of the agrarian complex to be renewed;
  • Ukraine simplified the procedure of agricultural land allocation.

Source: APK-Inform.

Latest USDA weather update

Volume 101, No. 15, full report available here.

Early-week cold gave way to more seasonable temperatures, while unfavorable dryness persisted in parts of Ukraine.

Temperatures during the beginning of the period dropped as low as -8°C across central and eastern Ukraine and -5°C in Russia’s Southern and North Caucasus Districts.  

Winter wheat in the coldest areas was likely in the tillering to early jointing stages (G.S. 30-31) of development, and consequently could withstand temperatures as low as -9°C.  However, more advanced winter grains in Ukraine may have been susceptible to burnback in the coldest locales.  By week’s end, temperatures rebounded into the teens and lower 20s (°C), mitigating any further freeze threat.  

More importantly, the first significant rain of the spring (locally up to 25 mm) arrived in Ukraine, providing much-needed soil moisture for vegetative winter crops and recently-planted small grains.  Despite the rain, longer term deficits persists, with north-central portions of Ukraine - a key corn area - reporting less than 50 percent of normal precipitation over the past 90 days.  

In contrast, additional light to moderate rain and wet snow (2-20 mm liquid equivalent) in Russia, Belarus, and Moldova maintained adequate soil moisture for winter wheat development and upcoming summer crop planting.

Tuesday, 15 April 2014

Ukraine farmers finish spring planting

Here's a copy of my article in this weeks Farmers Weekly Interactive written by Phil Case.

Spring drilling has got off to a flying start in Ukraine amid a growing sense of optimism for the future, says expatriate agronomist Mike Lee.

Following an unusually mild late winter, drilling started mid-March – up to a month earlier than in previous years.

All the spring peas, barley, wheat and oats are pretty much planted across the country, which remains under threat of invasion from Vladimir Putin’s Russia, according to reports in the Western press.

Now farmers are starting to plant the main spring crops of sunflowers, maize and soya, says Mr Lee.

“The spring planting season is very early this year. We have had a mild season and we are three to four weeks ahead of previous years,” he explains.

This season, spring plantings in Ukraine are forecast to be 9-10% down on last year.

A lack of cash, increased credit costs and the threat of war hanging over the country means most growers are adopting a cautious approach.

“Last year, commodity prices dropped significantly. Many people were growing maize as a way of trying to be profitable,” says Mr Lee.

“But that hasn't worked. People are short of cash. On top of that, the heightened war risk is making credit expensive.”

Diesel and fertiliser are the two big costs, but farmers are also trying to cut their wage and chemical bills.

Spring seed and chemicals are available to buy, but companies are typically charging 20-30% for farmers to buy products on credit.

As a result, farmers are trying to cut costs by buying generic chemicals and local seed.

Inputs costs are broadly similar to those of the UK and western Europe, but rented land is a lot cheaper, at £35-40/ha. However, prices are generally 20-30% lower than world market prices, because crops are mostly exported.

Owing to the dry field conditions, farmers who have previously deep cultivated will be reaping the benefits as roots grow deeper into moisture, says Mr Lee.

About half of the cropping in Ukraine is row cropping. And farmers generally use big drills, such as the Horsch Pronto, to drill cereals and Gaspardo precision drills for sunflowers and maize to cover the ground.

“They need to go for scale. If you look at the agricultural system in western Europe, it is small scale but very intensive farms,” he says.  “North America and Australia have big farms, but they are low-intensive. In Ukraine, you have the potential for intensive, large-scale farms, which is unprecedented.”

Ukraine has about 20 “super-large” farms of 100,000-500,000ha.

It is not uncommon to have a farming workforce of up to 40 people, alternating on shifts 24 hours a day. 

“The wheels need to be turning all the time,” says Mr Lee.  “For example, crop spraying will start this month and run through to November.  They are pretty much non-stop.”

So, what does Mr Lee think the future will hold for Ukraine?

“It’s not a straightforward situation. We still don’t know what will happen,” he admits.  “The geopolitical situation escalated. You have got Russia versus the West, and Ukraine as a pawn in the middle.  “Ukraine is being used as a catalyst for the re-emergence of Cold War sensitivities. Beneath that, you have a new interim government and elections on 25 May.

“Ukraine has a lot of issues – massive debts, corruption, and credit is very expensive.

“But there is this real sense of a possibility to improve life here.  The country has a real opportunity to develop and turn into what it should be.

“Can it do that without the influence of the West and Russia, which is trying to use the country to enact its influence?”

Russia has reportedly amassed roughly 40,000 troops near the federation’s border with eastern Ukraine.

But while the world waits to see if the massed Russian troops will invade, Mr Lee says the farming must go on in the country.

“We are out planting. From a farming perspective, we cannot wait until [Putin] decides what he’s going to do,” he adds.

“The planting season starts regardless of politics. The cycle continues.”

Mike Lee is a freelance consultant based in Ukraine. He updates his blog Agronomy-Ukraine and Twitter account @AgronomyUkraine with regular updates on farming and life in Ukraine.

Wednesday, 9 April 2014

Why the dry weather might not be all bad for Ukraine winter crops

Some rain happening now in western Ukraine, moving eastwards throughout the rest of the week.

This will stimulate germination and establishment of recently planted spring cereals and peas and  bring some relief to over wintered wheat and rape crops.

The dry winter and spring thus far might not necessarily be as bad for over wintered crops as it initially seems.

In dry conditions plant roots tend to go deeper looking for water and warmer than average (and warmer than last year soil temperature - see graph in the adjacent column) will have stimulated root development earlier in the season.

This will have allowed for a greater mass and length of root to develop, as can be seen on this chart.  The upshot of this is that if soil structure and everything else allows, there will be more roots deeper in to the soil profile which will be able to absorb water for longer as it drains past.

So the moral is to fix your soil structure so roots can develop to depth, it’ll pay dividends in a dry season.

Latest USDA weather update

Volume 101, No. 14, full report available here.

Sharply colder weather settled over the region, while unfavorable dryness persisted in parts of Ukraine.

A strong early-week cold front was followed by temperatures up to 5°C below normal, with nighttime readings dropping as low as -7°C across central and eastern Ukraine as well as portions of Russia’s Southern and North Caucasus Districts.

Winter wheat in the coldest areas was likely in the tillering to early jointing stages of development, and consequently could withstand temperatures as low as -9°C.

However, more advanced winter grains - particularly in Ukraine - may have reached the mid- to late-jointing stages, and therefore be susceptible to freeze damage from readings of -4°C or lower. In addition, Ukraine producers are in need of moisture due to a drier-than-normal winter and early spring, with rainfall during the past week (5 mm or less) doing little to improve winter crop prospects.

Short-term dryness also reduced moisture reserves for small grains in Belarus and Moldova.

In contrast, widespread rain and wet snow (5-25 mm liquid equivalent) maintained adequate soil moisture in Russia.

Monday, 7 April 2014

USDA latest weather update for western FSU

Volume 101, No. 13, Weather April 1, 2014, full report here.

Unseasonably warm, dry conditions were followed by sharply colder weather by week’s end.  

A strong area of high pressure maintained unusually warm weather over the region; temperatures averaged up to 10°C above normal in Belarus, 7°C above normal in Ukraine, and 8°C above normal in western Russia.  

Daytime highs topped 20°C from central Belarus southeastward into Ukraine and southern portions of Russia’s Southern District, which continued to foster a faster-than-normal pace of winter crop development.

However, the sunny skies and unseasonable warmth also increased water demands and further reduced soil moisture for winter wheat and rapeseed, especially in central and northern Ukraine.  

By week’s end, a strong cold front was accompanied by light to moderate showers (2-13 mm) across southern portions of Ukraine and Russia. 

Behind the front, temperatures dropped as low as -4°C in the more advanced southern growing areas, though wheat had not yet reached the temperature-sensitive jointing stages of development.  

Therefore, little - if any - widespread impact is expected from this week’s freeze.