Saturday, 28 February 2015

4KKM Crop Tour™ Twitter account

We now have a dedicated members only 4KKM Crop Tour™ Twitter account.

We will be posting pictures, video and running commentary on what we see as we progress through the tour.

It will be an opportunity to ask questions or seek clarification on what we are looking at.

It's the next best thing to being there yourself, in fact if you stay awake for twenty hours a day and sleep on a collapsed mattress next to a boiling pot of cabbage you might just believe you are.

This is a protected site which means it will only be visible to subscribers, drop me a line if you wish gain access and I'll send you details of how to pay.


Friday, 27 February 2015

4KKM Crop Tour™ update

The crop tour is starting to swing in to action this week so I told the kids to start packing their toy and prepare to leave our current home.

I say toy, the kids have loads of toys but if I'm carrying them from Bordeaux to London to Moscow and beyond then we’ll have to leave the rest behind which might be harsh but I think is an important lesson. 

I did tell them that if more people signed up to the tour then we might be able to afford the excess baggage on more toys. 

So those of you who said, “nah, we’ll ‘borrow’ a copy of the report” from someone who has signed up; you are directly responsible for my two year old having to decide which one of her favourite cuddly toys she can take with her and which get left behind to die.

Although the report will be useful, personally I think the real benefit will be following us on our Members Only Twitter account as we post photographs, video, commentary and answer questions as it happens in real time.

I set up a Paypal account so members of the tour could easily, seamlessly and safely send me their contribution in a variety of currencies.
I think it has worked well from that perspective but what Pay-not-my-pal conveniently failed to tell me was that as a new seller they would hold on to the funds for 21 days just to make sure I'm not an international drug smuggler laundering funds or a Russian oligarch looking to buy a football team.

Actually what they said is funds will be held for 21 days from the first transaction for the next 60 days.  Got that?  Me neither.

Over the last week I have had a steady communication with Pay-not-my-pal which has been like talking to a twelve year old; unless you ask the exact right question they won’t tell you what it is you actually need to hear but as you have never used the service before you don’t know what it is you need to hear.

And they have dodged my question about can charge them interest.

So, move over Gold Car, you are still the worst car hire company that has ever existed but your position as my number one least favourite company has been lost to Paypal, the company that charges you a hefty fee not to transact your funds.

Technology is brilliant except when it isn't

Scientists have developed 5G technology that allows huge amounts of data to be downloaded in seconds.

The example they give is it’s possible to download a feature length film in a matter of seconds.

That’s great and all, but if your connection to the internet is along a piece of string strung from a telegraph pole down a winding and windy road then it’s still going to be slower than a banker admitting to tax evasion.

Surely it’s better to get access to the internet up and running for all before we make it jump through hoops.

As my Dad used to say “technology is great son, you can phone all around the world but unless someone is there at the end to pick up, it counts for nowt”.

Tuesday, 24 February 2015

Latest USDA weather update for western FSU

Mild, mostly dry weather sustained favourable overwintering conditions for wheat and barley, though southern growing areas remained devoid of snow cover despite the arrival of colder air.

High pressure provided sunny skies along with near- to above-normal temperatures (locally up to 5°C above normal) from Belarus and northern Ukraine into northern Russia, with winter wheat remaining dormant under a shallow snow pack (2-10 cm) in Ukraine and more than 25 cm of snow in Russia.

Farther south, early-week rain (1-10 mm) in Russia’s Southern and North Caucasus Districts sustained favourable soil moisture reserves for spring growth, but crops remained devoid of snow cover from central Ukraine into southern Russia.

Despite the arrival of somewhat chillier air (locally more than 3°C below normal) in the Southern District, night-time lows of -15°C or greater did not pose a risk for freeze damage or winter kill.

Monday, 23 February 2015

Ukraine grains influence world market price

According to latest USDA estimates world grain production for 2014/15 MY will total 1.98bmt
including 63.8mmt or 3.1% from Ukraine.

Now the interesting thing here is Ukraine produces more than is required for domestic consumption so much so that its share of the world market of grains is quite significant.

According to APK-Inform estimates Ukraine could in the current marketing year’s export in excess of 34mmt or 54% of its production or 10.1% of world grain exports.

It’s this last figure that demonstrates the scale of influence Ukraine grain production has on the world market and bearing in mind this is very likely to be down for H15 it might just bring some welcome relief to grain farmers the world over.

Tuesday, 17 February 2015

Belarus milk yield up; more bad news for EU dairy farmers?

Belarus has said the current modernisation of their dairy industry will allow 6.9mmt of milk to be produced in 2015, up 10% on the previous year.

The Belarusian Minister of Agriculture reported that a total of 300 dairy farms were built and 1,063 were remodelled as part of the national program for developing the dairy industry since 2010.

Now this is a Minister of Agriculture of a totalitarian agricultural state that has a former collective farm director at its head, who likes to take a direct and personal role in how farming is conducted so I would treat these figures with a degree of caution.

But Belarus has been upgrading its agriculture for a number of years now and the president does take direct action in that process so it’s very likely that milk output (if not efficiency) will increase and it will find a home in Russia.

If you listen to pretty much anyone associated with EU dairy industry over the last six months it will be catastrophic as Russia has been such a significant market for dairy products that the food sanctions has been the root cause of all the low prices.

So Belarus upping milk output and taking a larger share of the Russia dairy market which it will do as a member of the Customs Union is a problem for western dairy farmers?

Not necessarily.

Bringing in sanctions has had an impact and some sectors felt it more than others and it may well have been the final nail in a number of coffins but a lot of the shouting is just part of the process to leverage compensation from the EU emergency fund.

Isn't the real long term problem of low milk prices oversupply, that there is too much milk about for the domestic and global market?

EU milk quotas are about to be dropped so I guess we’ll find out soon enough.

Wednesday, 11 February 2015

USDA raises stock estimates and prices fall

Yesterday the USDA raised its estimate of world wheat stockpiles by 0.9% to 197.85mmt.

Both Chicago wheat and corn prices fell after the report despite concerns about shipments from Ukraine and Russia.

Might be a bit hasty as what I'm hearing is the Russian ministry of agriculture are considering increasing the export tax rate which came in to force at the beginning of February and extending the length of time it will be in place.

Meanwhile Ukraine’s ministry of agriculture has started making much stronger comments about taking action if grain exports exceed limits previously agreed during a period of much softer and inclusive announcements.

The Russian story is at the moment a rumour but is entirely possible; the Ukraine situation is highly probable as traders will look to take advantage of the devaluation in the country's hryvnia currency regardless of any MoU.

To date Ukraine has exported 22mmt of grain, including 8.7mmt of wheat, 9.2mmt of maize and 3.8mmt of barley.

Saturday, 7 February 2015

Russian winter crops in great condition, possibly

Earlier this week the Russian Ministry of Agriculture reported that 21% of the winter crop is estimated as poor.

The spokesperson reminded us that Russia had planted 16.8mha of winter crops for harvest 2015 so that makes 3.5mha in what they describe as "poor and thinned condition or without crop sprouts".

As a measurement “poor and thinned” is subjective and tells me jack all about the condition and I have no idea what “without sprouts” means; failed to emerge, no tillers; no main stem, what?

As a minimum I would like to know the plant population and growth stage particularly the number of leaves and tillers (although Russian wheat doesn't tiller that much) to get some objective measurement of crop condition. 

Ideally also the seed-rate and thousand grain weight would enable me to base reference how much seed was planted and compare that to what had emerged and established thus giving me some insight in to what had happened to the crop since planting.

I mean if the crop was planted thin then it will be thin so that's no indication there has been a problem.

Additional information like the green area index (how much green material there is), the incidence and severity of any pest or disease present, damaged or dead leaves, weed type, growth stage and type and a general overview looking at the colour, root growth, seedbed and soil conditions would be extremely helpful.

I've worked with a lot of Russian agronomists and great chaps they are too, but not one could calculate the plant population or identify the growth stage when asked.  Not their fault, that sort of information was neither required nor taught in former times when the main goal was to put stuff on to a crop and hit production quota.

So the information from the ministry is subjective at best and bearing in mind the condition of the fields right now – the attached picture is a wheat field in Kursk yesterday – how on earth can anyone make any assessment at all?

On the one square meter out of 16mha we looked at yesterday, we can confidently report that 100% of winter crops look boss.

Friday, 6 February 2015

Friday’s agri-business news round-up (or should that be glyphosate?)

The Russian trade ban dominated discussions in the EU this week with the commission urging
member states to show “solidarity” and to refrain from arranging their own talks in order to get around their ban for their own products.

The EU Agricultural Commissioner Phil "the Hulk" Hogan admitted that EU law did not prevent member states from establishing bilateral trade agreements but that a common EU approach would be more beneficial than one-off deals.

Which depends on where you are in the supply chain Phil; I just don’t see a Hungarian dairy farmer giving a toss about macro politics nor the marginal MP trying to secure the rural vote ahead of a general election.

The FAO have opened an office in Moscow to bolster cooperation with Russia in agricultural and food security-related matters.

I'm only surprised by this because I assumed they would already have an office in Russia although the inauguration of the new office is scheduled for the end of the year so don’t expect too much too soon.

Seven out of nine Belarusian meat processing companies have resumed supplies of beef to Russia previously banned over African swine fever virus.

Showing my ignorance here but can cows contract swine fever?

According to the office of a German parliament member the armed conflict in Ukraine is being used as a smokescreen for the seizure of farmland by foreign firms funded by the World Bank and EBRD.  The other story doing the rounds is that Ukraine will be forced to grow genetically modified crops in return for foreign aid hand-outs.

Personally I don’t buy either of these rumours for a number of reasons including anyone can secure land in Ukraine, you don’t need a war to hide behind and growing GM is one thing but who will buy it?  Having said that these rumours have been around since last year and they do keep cropping up so something’s afoot.

Kazakhstan now and according to the analytical service, the volume of agricultural investments in the country is up 17% on 2013.

It may be that while Ukraine is on temporary hold as an agri-investment destination then Kazakhstan reaps the benefit, plenty of potential out there...if it rains.

Still in Kazakhstan and the Minister of Agriculture has proposed dropping grain export subsidies ($81 million) in favour of spending on supporting farmers, developing seed production and purchasing equipment.  Seems sensible.

In the same week Kazakhstan proposes dropping export subsidies, Russia imposed their export tax priced at no less than €35/mt and current rumours are the Ministry is considering increasing the rate and extending the term which has not gone down well at all.

Unlike vodka which has seen the price slashed in Russia.

My topical advice this week then is don’t booze if you are considering signing an extension to a trade tariff, you might do something rash.

Have a good weekend.

Thursday, 5 February 2015

FAO report on the agriculture sector in Ukraine's conflict zone

Last week the FAO and Ukraine’s Ministry of Agriculture completed a joint rapid needs assessment (RNA) of the agriculture sector affected by the conflict in the east of the country.

This is a précis of their findings in their words.
  • Up to 30% of the winter wheat was lost in June/July due to conflict.
  • Lot of people could not plant spring crops (barley, corn) due to the ongoing shelling and fighting and nearly 50% of the autumn crop could not planted in some areas.
  • Spring sunflower that could not be harvested matured with seeds falling on the field affecting land for subsequent cropping season - meanwhile lower production affecting the raw material supply to oil industries.
  • Fields were also burnt due to shelling affecting harvest.
  • Farmers are worried about winter wheat (major crop) due to lack of sufficient fertilizer, which is needed after snow starts melting away.
  • Displaced families that have returned back need to restore their agriculture, but lack capital to purchase the inputs (seed, fertilizer, animal feed, etc).
  • Biggest poultry holding, pig farms and cropping land close to the borderline on both sides have been severely damaged.
  • Many livestock heads were either killed or taken away by the rebels during the fight (e.g. out of 53,000 cows in the Donbas region, 10,000 heads have been reported killed) and livestock shelters have been damaged or destroyed.
  • Farmers were forced to slaughter many cattle and pigs due to fear of losing them or lack of animal feed.
  • Fuel and fertilizer prices have gone up.
  • Trade with Russia has disrupted, so is the opportunity to sell the produce – enterprises are facing difficulty to transport the produce to other areas due to increasing costs and the need to detour.
  • Devaluation of UAH against USD is exacerbating the situation as the input prices have gone up, but the prices of agriculture produce have remained unchanged.
  • Access to credit is a major concern - farmers face difficulty accessing credit from the banks for restoring agriculture.
  • The enterprises are already losing and are therefore face difficulty in paying the land rent to the small shareholders.
  • Some lands are still mined and trenches are dug – these lands cannot be planted, especially for those whose lands are stretched along the ‘borderline’ and fall in highly insecured zone (UXOs are littering around).
  • Orchards need to be made ready for spring with fertilizer, herbicide and fungicide, labour charges and rent.
  • Machineries such as cultivator, seeder, harvester, tractors and accessories were lost or damaged by shelling, or taken away.
  • Families living in the villages within 40-60 km of the ‘borderline’ in Luhansk have lost many livestock (an example from a nearby village where 100 cows were killed out of a total stock of 120 in Northern Luhansk).
  • Some families need money to repair house damages, which limits their capability to purchase crop and livestock inputs.
  • Small families supported by the farming enterprises with inputs and machineries may not get support the next season due to problems faced by the these enterprises.
  • Supplementary feed and crop input packages to sustain their subsistence form of farming is an important priority.

Wednesday, 4 February 2015

Agri-news from Russia (Masha the wonder cow)

Breeders in southern Russian have developed a sanction busting “anti-crisis cow” that “doesn't need to be fed in the winter and can survive periods of not eating at all.”

Brilliant, a bit like camalina which was doing the rounds in the FSU a few years back as the miracle crop that could be grown without any inputs apart from seed…and some diesel…and probably a herbicide…and some P & K…and while we’re at it better bung in an insecticide.

Restrictions on beef imports from Belarus to Russia imposed for quarantine reasons are to be lifted.

To be honest I lose track of all these restrictions and sanctions, I think they may have been imposed in December last year but I could equally be wrong.  Anyhow fresh Belarussian beef will be back on the menu in Moscow any minute now.

Which reminds me of the time I found myself eating fresh beef in a Belarussian slaughterhouse except I didn't know it was a slaughter house until we got up from the table pie-eyed on vodka for a tour of the facility.

Late at night it was too and I’ll tell you this for nothing, being in a cold, dark Belarussian abattoir late at night in the middle of winter looking at piles of animal body parts sobers you up pretty darn quickly.

The Russian tax on wheat exports which was first announced back in December came in to force at the weekend.

If I've read this right it’s 15% of the customs value of the consignment plus €7.5 but not less than €35/mt which is massive and I assume all but stops exports of wheat from Russia.

The reason given was to reduce the attractiveness of Russian grain sales to foreign markets and stabilise prices of flour and bread in the country which is always a political hot potato.

In the same week it’s been reported that the price of vodka is to be reduced, surely this isn't just a case of “bread and circus”?

Just how bad is the dry weather for Russian wheat?

Dry weather in Russia has left wheat vulnerable to damage this winter, said Amy Reynolds, a senior
economist at the International Grains Council in London.

The key phrase here is “in London”, relying on satellite data and remote weather reports doesn't always capture the full agronomic picture.

Ms Reynolds isn't alone in her pessimistic agronomy report; the internet is full of imminent catastrophe for the Russian wheat harvest and Russian doom and gloom in general.

I suspect some of this stems from the anti-Russian rhetoric pushed into the news by the spin doctors as part of the broader effort to put pressure on Russia to amend its current foreign policy in Ukraine.

But looking at this from an agronomist position and I'm less pessimistic on RU H15 forecast.

True winter crops went in to the ground in dry conditions, struggled to develop and intermittent snow cover and cold will have increased the chances of winter kill.

But that dry weather will have encouraged roots to go looking for water and grown deeper in to the soil profile in the autumn which will help later in the season when it really does get dry.

While reports are saying things like rainfall is half of normal whatever normal is, what that actually means is the soil is still wet – OK it’s frozen now but any precipitation be it rain or snow will saturate the soil come the thaw.

And if we do look at the satellite data such as the US Air Force Weather Agency it currently shows that out of the twenty oblasts they monitor in western and central Russia, currently 14 are above or well above average precipitation with the balance of six oblast not that far below normal.

Doesn't sound too bad to me but the the only way to be really sure will be to go and have a look yourself.

I’ll be doing just that in April.

Latest USDA weather update for western FSU

Rain and snow over Ukraine and western Russia boosted soil moisture reserves for dormant winter crops, while warm, wet weather kept southern wheat areas devoid of snow cover.

Widespread rain and snow (5-25 mm liquid equivalent, locally more) across Ukraine and central Russia further improved moisture reserves for dormant winter wheat following a pronounced autumn drought.

Snow fell from north-central Ukraine into central Russia, with depths averaging 5 to 15 cm in northern Ukraine to more than 25 cm over much of western and central Russia.

The snow pack afforded sufficient protection from potential winter kill in the southern Volga District, where night time readings dipped below -20°C.

In contrast, continuing warmth (highs of 10-15°C) in south western Russia along with variable showers (3-25 mm) kept winter wheat devoid of a protective snow pack and continued to reduce crop cold hardiness.

However, the warmth minimized the risk for winter kill during the period.