Named three troubles record wheat harvest in Russia

As the peasant wisdom says, not the harvest that is in the fields, but the one that is in the bins. The current record grain harvest with its bunker weight is moving to storage. And experts are now at a loss: will these bins of the motherland be enough for us to accommodate the collected millions of tons?

This season we have harvested 147.4 million tons of grain in bunker weight. And this is not a point, but rather a comma, since the harvesting campaign has not been completed, the battle for bread will continue in Siberia, the Far East and some other regions. In general, Minister of Agriculture Dmitry Patrushev is expected to harvest at least 150 million tons of grain by the end of the season.

The previous record was set in 2017. However, it cannot stand comparison with current indicators – “only” 135 million tons, including 68 million tons of wheat.

This year there will be about 100 million tons of bread. Of course, this opens up wide opportunities for export. If earlier we spoke about our readiness to ship 50 million tons of wheat to different countries and continents, now we are able to surpass this milestone. Only now we have problems with the export of grain: Russian grain, to put it mildly, is not welcome all over the world.

Be that as it may, the vast majority of the harvest will remain at home. And here the problem already arises: what, in fact, to do with it?

Bunker weight, who does not know, is the crop already harvested from the field, but not yet cleaned and dried. Where are we going to take it now? According to experts, the capacities of domestic elevators, which are not accustomed to accepting records, are designed for 120 million tons. Moreover, only half of the terminals have modern equipment. The remaining areas are by and large not adapted to such purposes. And the situation is saved only by the fact that well-dried grain can be stored in a barn for up to three years. It does not ask for food and can serve us well next year – if the weather fails or spare parts for grain harvesters are in short supply.

Reserve for the future, it’s businesslike. But what to do with the record now?

Three problems come to the fore. The first is the quality of the current cereals. There is no statistical data on the current harvest yet, but in agrarian circles they say that it is not very high, there is a lot of wheat of the 4th and 5th grade. This is, in fact, a forage product for fattening livestock. The blame for everything, according to farmers, is the export duty imposed by the Ministry of Agriculture in order to restrain the rise in prices in the domestic market. It was planned that the money from it, received by the state in 2021, would be returned again to the grain growers in the spring of 2022. But as soon as the money fell into the hands of officials, they asked themselves the question: why, in fact, should they be given in full to the grain growers? Livestock breeders, crop growers, and flour millers also need funds … In general, each sister got an earring. As a result, about 150 billion rubles were not returned to the grain growers – this is a lot of money! They saved this amount in the spring sowing campaign and in caring for plantings. They did not purchase sufficient means of chemical plant protection, agricultural machinery and spare parts for it, and simplified the cultivation technology. All this has led to the fact that the quality of grain this year is worse than last year …

This gives rise to problem number two: with such a high harvest, prices on the domestic market are unprofitable for farmers. On world markets, wheat is traded at $350 per ton; in Russia, producers sell for 9,000 rubles, or about 150 “bucks”. And there are regions where it is bought for 6 thousand.

At such a cost, the harvest is unprofitable, not only to sell, but even to harvest: it is obtained below cost.

To balance prices between the manufacturer and the buyer in the store, the state creates a special intervention fund. In the world, it begins to work automatically, without any preliminary decisions of officials. When the weighted average price reaches a minimum, the state opens purchases from the manufacturer and thereby raises the price for him. And if there is not enough grain on the market and it rises in price, the government sells it from its bins so that prices for the consumer do not accelerate.

We also have an intervention fund. But, according to the grain growers, it does not work effectively. That is why the prices for bakery products in stores grow even with a high harvest, but for the peasants they decrease and it becomes unprofitable for them to grow grain crops. Following the results of this year, many grain growers will switch to the cultivation of other crops.

And, finally, the third problem is the export of Russian wheat. According to farmers, under the sanctions, it is urgent to launch an “export vacuum cleaner”. The farmers themselves turned it on a long time ago and take it out on any floating means, using, among other things, small ports where loading is taking place. All the same, the backlog from the level of last year is still significant – 12%.

There are no large-tonnage ships for transporting grain – the Europeans do not lease them to Russian producers. Sky-high prices for cargo insurance are set. All this is the result of anti-Russian sanctions, which allegedly do not exist for food exports. Officials are developing a variant in which they themselves do not particularly believe. That importing countries (mainly from Africa and South Asia) will themselves come to the port of Novorossiysk and load. But if Russia is not able to charter a ship and draw up all international documents, then one cannot count on the fact that the conditional Republic of the Congo (one of the main importers) will do this ..

Let’s rejoice for the success of Russian farmers. But let’s not particularly hope that with a record harvest, the prices for the same bread will creep down. Not in this life!.