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IKAR in Mass Media

Black Earth flags setback from Russia dryness

16 ноября 2014 года

Black Earth Farming revealed a compromised start to a plan to raise the level of wheat in its crop mix, with winter-sown crop "at high risk" thanks to the Russian dryness which has rung alarm bells on world markets.

Black Earth Farming, which controls 271,000 hectares of farmland, said that most of its farms had seen "somewhat unusual" weather conditions, which saw high May and June rainfall followed by "extremely dry conditions from June onwards.

"On about 70% of our area the cumulative rainfall for our farms this year to date is now below 2010 levels and very substantially below seven-year averages," Richard Warburton, the Black Earth Farming chief executive, said.

Russian crop production slumped in 2010 thanks to drought, with Black Earth Farming itself seeing its yields slump, by 46% to 1.9 tonnes per hectare in the case of winter wheat and 79% to 0.7 tonnes per hectare for corn, although the dryness has set in later this year, meaning 2014 results are less affected.

'Poorly established'

Indeed, Black Earth Farming said that the dry summer conditions had brought some benefits, in terms of "efficient harvesting and lower [crop] drying and trans-shipment costs".

However, for autumn-harvested crops, the dry weather had wrought some damage to yields, cutting the corn result by 18% to 3.5 tonnes per hectare, and the soybean yield by one-third to 0.6 tonnes per hectare – both the lowest figures since 2010.

And the dryness had spelled difficulties too for the 42,000 hectares of winter wheat sown by the group.

Mr Warburton said: "Although 60% emerged early, the dry conditions meant 30% emerged after late September rainfall.

"Circa 10% is poorly established and at high risk of not being advanced enough to survive the winter."

'In the risk zone'

The comments are the latest in a series, from analysis group such as SovEcon and Ikar and farm operators such as Agrokultura, voicing concern at Russia's winter grains prospects, thanks to dryness, which has left crops vulnerable to winter cold.

While a cold spell last month has given way to milder temperatures, this has represented a mixed blessing, in coming unaccompanied by rainfall.

Weather service MDA forecast that earlier this week that dryness in the former Soviet Union wheat belt "will continue to expand".

In Ukraine, the Ukrainian Hydrometeorological Center on Thursday said that "about 30% of crops are in the risk zone" for being damaged by frost, in being sown late, in the second half of October, and so lacking time to develop and harden off before winter.

For Russia, winterkill losses have ranged in recent years from 2.5% in a "good" season, in the winter of 2011-12, to 12.6% in 2009-10, according to SovEcon.

While crops can be reseeded in the spring, spring wheat tends to have a significantly lower yield, if holding the potential for better quality.

Rapeseed out

The dryness-compromised start to Black Earth Farming's growing season comes as the group is attempting to rebuild its wheat area, even while lowering overall crop sowings – largely at the expense of oilseeds.

The group is planning to cut by 28,000 hectares to 156,000 hectares its crop area for 2015-16, but with "an increased area of wheat", but with soybean area, 16,926 hectares for the latest harvest to be "significantly reduced".

Rapeseed, which accounted for 18,083 hectares at this year's harvest, "dropped" altogether.

The International Grains Council two weeks ago flagged a "marked contraction" in Ukrainian rapeseed sowings this year, "a continuation of the steady downward trend of recent seasons", and a reflection of a "gradual switch to spring sown crops which are less prone to damage from adverse weather".

Back into the black

Black Earth Farming unveiled earnings of $4.69m for the July-to-September quarter, compared with an after-tax loss of $26.9m a year before.

The improvement reflected was down to factors including a higher-value mix in crop sales, some recovery in prices, and reduced financial and distribution expenses.

"Prices recovered somewhat in the quarter, and higher wheat and barley yields offset disappointing corn and soya yields, which allowed the company to mark up the value of its 2014 crop," Mr Warburton said.

Nonetheless, Black Earth Farming shares, which are listed in Stockholm, eased 0.9% to SEK3.25 in morning deals.

Source: Agrimoney.com  |  #grain   |  Comments: 0   Views: 94

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