Soviet-Era Grain Record Seen Tumbling on Bumper Russian Crop

(Bloomberg – bloomberg.com – Anatoly Medetsky – August 21, 2017)

A quarter century after the collapse of the USSR, Russian farmers are finally poised to beat the record for grain production that the country set during the Soviet era.

The harvest will total at least 130.7 million metric tons this year on bumper wheat and corn crops, said Vladimir Petrichenko, director general of Moscow-based consultant ProZerno. That would push production 2.6 percent above the previous all-time high in 1978, a year before the Soviet invasion of Afghanistan under leader Leonid Brezhnev.

“Weather conditions this year have been ideal,” Petrichenko said by phone. “It fell on a key period for plant development.”

Farmers will gather more wheat and corn than ever before, while the barley crop will be the largest since 2008, ProZerno figures show. Those estimates may go higher still as Siberia collects more grain, with potential for wheat output to reach 85 million tons, Petrichenko said.

Crop projections are rising after rain spurred growth in European parts of Russia, contrasting with dry conditions that hurt crops in the U.S. and Canada. The gains cement Russia’s position as a top producer this year. It’s expected to be the biggest wheat exporter in the 2017-18 season, according to the U.S. Department of Agriculture.

[READ: Russia Dominates Egypt Wheat Purchases by Undercutting Prices]

Russia’s giant wheat crop, more than a half of its total grain harvest, has seen the country dominate tenders in Egypt, the world’s biggest importer. The North African nation bought five out of six cargoes from Russia at its latest offering.

The bumper harvest has pushed Russian export prices lower, increasing the country’s competitiveness against rival nations, with rates falling for a third straight week to a two-month low as of Friday.

ProZerno’s estimates for Russia’s main grain crops:

Wheat — 80 million tons.
Barley — 19 million tons.
Corn — 16.3 million tons.

©2017 Bloomberg L.P. All Rights Reserved. Article also appeared at bloomberg.com/news/articles/2017-08-21/soviet-era-grain-record-seen-tumbling-on-bumper-russian-harvest

[featured image is file image, adapted from USDA document from early 2017, citing sources including Rosstat data from 2011-2015]