Russian Wheat Prospects Continue to Deteriorate

The USDA reduced estimated production for 2012/13 Russia wheat to 43.0 million tons, down 6.0 million or 12 percent from last month and down 13.2 million or 24 percent from last year. This would mark the third-lowest harvest since 2000/01. (Russia’s wheat production was frequently below 43 million tons during the 1990’s due chiefly to a drop in yield following the breakup of the Soviet Union and the loss of heavy State subsidies to the agriculture sector.) The USDA does not maintain official area and production data for winter and spring wheat individually, but analysis of weather data and satellite imagery indicate that yield prospects for both crops are extremely poor. Wheat output in the Southern, North Caucasus, and Siberian Districts, which together typically account for nearly 60 percent of Russia’s total wheat production, will almost certainly fall substantially below the level of 2010, when Russia's grain harvest plunged due to severe drought. Wheat production in the Volga District will exceed the disastrous level of 2010 but will be substantially below average. Only in the Central District have crop conditions been generally favorable, with output likely to match or surpass last year’s level.

Winter wheat usually comprises nearly two-thirds of Russia’s wheat production, and nearly all of the country’s winter wheat is grown in European Russia, including the Southern, North Caucasus, Central, and Volga Districts. Early-season conditions for winter wheat were poor in the southernmost production zone (specifically in Krasnodar and Stavropol territories), due in part to excessive fall dryness and poor establishment prior to winter dormancy. Winter-grain conditions elsewhere in European Russia were good at the beginning of April, and favorable yield prospects in these regions (including the northern part of the Southern District and in the Central and Volga Districts) were expected to compensate for the lower potential yields to the south. During April, however, the weather turned hot and drought prevailed throughout most of the growing season in the Volga Valley and several adjacent territories in the Central and Southern Districts. (See June 20 trip report.)

According to August 7 harvest data from the Ministry of Agriculture, cumulative winter-wheat yield is down 23 percent compared to the same date last year in the Southern District (with harvest 93 percent complete), down 43 percent in the North Caucasus District (92 percent complete), and down 33 percent in the Volga District (41 percent complete). Yields in the Central District are running slightly above last year’s level, with harvest 72 percent complete.

Current prospects in the spring-wheat zone are similarly poor. Because of the proven high resiliency of Russian spring wheat, the crop could still have rebounded to some degree if July had brought timely rainfall. Conditions in most areas remained unfavorably hot and dry, however, and the estimated yield dropped for the second consecutive month. Satellite-derived vegetative indices (NDVI) indicate that overall conditions in the Siberian District (including Altai, Novosibirsk, and Omsk, which together account for about 70 percent of Siberian wheat production) and the Ural District (chiefly Kurgan and Chelyabinsk) are arguably the worst in at least twelve years. In the Volga District, where both winter wheat and spring wheat are grown, crop conditions were good or very good in May but deteriorated throughout June and July in most territories. Spring-wheat harvest last from mid-August through September in the Volga District, and from early September through October in the Ural and Siberian Districts.

Current USDA area and production estimates for grains and other agricultural commodities are available on IPAD’s Agricultural Production page, or at PSD Online.