Black Earth Farming revealed it had fallen victim to the wet conditions which exacerbated the quality setbacks to Russia’s – huge – wheat harvest this year, leaving the group facing a steep discount on its sales prices.
The farm operator in Russia’s central region said it had achieved “record” yields in winter wheat and spring barley harvest, of 4.3 tonnes per hectare and 2.2 tonnes per hectare respectively.
However, that was below the yield figures of 4.9 tonnes per hectare and 2.8 tonnes per hectare the group achieved in its early harvest, as revealed in August.
And Black Earth cautioned that crop quality has been “significantly reduced”, thanks to a “very wet August, which delayed harvest and caused grains to chit in the ear”.
Wet weather on ripe crops can encourage kernels to sprout, cutting their suitability for food consumption and, in extreme cases, even for use in livestock feed.
The impact of the quality setback was for the group to forecast that its wheat sales price “is likely to be reduced some 20-25% to circa 5,700 roubles per tonne excluding VAT”.
And the data illustrate a broader issue of quality setbacks in Russia’s central federal region from rains “which reduced protein content, gluten content”, said Andrey Sizov, managing director at influential analysis group SovEcon.
“Also in some cases there was sprouted grain,” for which demand was “limited”, Mr Sizov told Agrimoney.com.
‘Gluten is quite low’
Quality had been an issue in some other parts of Russia too, albeit thanks in part to the typical pay-off of high yielding crops – the country’s wheat harvest was a record 72m tonnes this year – proving relatively weak in protein.
“Gluten is quite low,” Mr Sizov said, flagging that so-called third grade milling wheat, with a gluten content of 23% of more, equivalent to about 12.5% total protein, this year appearing to account for only 20-25% of the harvest, compared with the typical 30-35%.
With lower quality, fourth grade milling wheat comprising roughly half the harvest, slightly higher than the usual proportion, the quantity of fifth grade, feed grade wheat was sharply higher, he said, albeit with the caveat that official data on crop specifications had yet to be published.
“Russia will be exporting more feed grain wheat this season,” potentially to countries such as Thailand, a large poultry producer, with demand likely to come in part at the expense of corn.
Discount to milling wheat
Nonetheless, the record extent of the harvest means that, in tonnage terms, supplies of higher grade wheat will not be so much lower than usual levels, with third grade wheat volumes likely at about 18m-19m tonnes, “slightly below” the typical 20m tonnes.
Indeed, there were sufficient supplies for many merchants to buy up some of the lower grade wheat, as Black Earth Farming produced this year, to blend into higher quality grain – albeit at a price discount.
Mr Sizov underlined that feed wheat including sprouted grain was priced at about 5,800-6,000 roubles per tonne, compared with 8,000-9,000 per tonne for milling wheat.
Sowings for 2017
Black Earth Farming added that, in results from its autumn harvest, the sunflower crop had achieved 2.0 tonnes per hectare so far, with 31% of the crop in the barn.
Last year, the group achieved a final yield of 2.2 tonnes per hectare.
For corn, of which 12% has been reaped, yields were coming in at 5.1 tonnes per hectare, compared with the final result of 5.3 tonnes per hectare last year.
Black Earth Farming added that it had sown 43,600 hectares of winter wheat for the 2017 harvest, crop which “is all established well and in very good condition”.
(Source – http://www.agrimoney.com/news/black-earth-underlines-cloud-over-quality-of-russias-huge-wheat-harvest–10021.html)