The drought negatively affected the future grain harvest in Russia

No matter what food delights the agrarians spoil us with, bread for Russians has been and remains the main product. But here’s the problem: the current harvest will not give us the record that happened a year ago – 157 million tons of grain. According to most forecasts, the gross harvest will now be only about 130 million tons. Will they be enough to feed? And what will be the price of our daily bread?

In the southern regions of the country, mowing has already begun and is even proceeding at a faster pace. However, grain yields are not encouraging. In the main granary of the country – in the Kuban – it is 10 centners per hectare less than it was a year ago.

The notorious weather factor will certainly affect the gross harvest. By the way, last year it was thanks to him – and not some miracle seeds or advanced technologies – that the record was set. As the grain growers assure, the weather then stood as ordered.

Today, problems have already emerged in some regions. So, the drought hit the Novosibirsk region, where even a state of emergency was introduced. The same trouble came to the Volga region. As a result, in Tatarstan, the gross harvest may be reduced from 5.2 million tons last year to 3.7-3.8 this year.

All these factors taken together make most experts think that the current harvest will be less than last year’s, though not by much. However, there are also tougher assessments and pessimistic forecasts.

“I would not say that the harvest is expected to be only “slightly less” than last year,” says Vasily Uzun, Doctor of Economics, Chief Researcher at the RANEPA Center for Agricultural Policy. – According to the forecast of the Ministry of Agriculture, this year it will amount to about 123 million tons, 30 million less than in 2022. This volume significantly affects even the world grain market. There is nothing surprising here: after a record, the manufacturer almost always has a recession. But for domestic consumption, we have enough with a margin, there will also be left for export.

– Can we expect that prices for Russian producers in the domestic market will rise after the harvest decline? Last year’s prices did not suit them, many grain growers even “retrained” for other directions.

– If the world market loses 30 million tons of Russian grain, it cannot be ruled out that world prices will rise. However, the difficulty is that we have an export duty that slows down domestic prices. It is impossible to say for sure that they will become profitable for manufacturers. The state takes 70% of the duty into its budget, the peasants do not win anything, since the duty “eats” their income.

– What to do?

– Grain growers can get their profit only in one case. If the country noticeably increases the use of grain in the domestic market: its processing and the development of animal husbandry. High domestic demand for these needs will keep prices acceptable to farmers.

It is necessary for such a miracle to happen in Russia. For example, Italy does not sell its grain at all, on the contrary, it buys it all over the world, and then processes its harvest and that bought in other countries into finished products – pasta, spaghetti, and so on. This approach gives them huge profits.

– But last year Russia greatly increased its flour exports…

– It is necessary to continue to work in this direction, to process not just into flour, but into finished products. A kilogram of pasta costs several times more than a kilogram of grain.

– With processing it is clear. But animal husbandry can be immediately excluded from this list, the number of cattle is declining in our country …

– In the diet of cows, grains occupy a small part. The main consumer of grains is poultry and pig breeding. The latter industry is generally developing very rapidly, pork prices have approached poultry meat. So, on the one hand, the export duty “eats” the incomes of the peasants, but on the other hand, it encourages the development of related branches of agriculture.

– In Russia today there is a solid transitional stock of last year’s wheat. What to do with him? After all, the elevators already receive new grain?

– There was a fear that last year’s balances would put a lot of pressure on the prices of the new crop and producers would generally be at a loss. This always happens at the beginning of the harvesting campaign. Fortunately, prices not only did not decrease, but even increased significantly compared to last year, wheat at 11-12 rubles per kilogram. Most likely, the situation is fueled by forecasts for a low harvest – they say, it is better to buy now, because tomorrow it will be more expensive. Transitional stocks today are very actively exported.

– High wheat prices on the domestic market, of course, are beneficial for producers. But what about consumers? Will the price of bread rise? How much will it cost?

– You don’t have to worry about it. The price of a loaf in the cost of production consists of other ingredients, the cost of wheat affects very little.