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USDA Report Update & Russian Naval Mines Causing New Problems

Updated: Apr 8

Update for April 1st, 2022


The USDA Quarterly Stocks and Prospective Plantings reports were released yesterday. Corn, soybean and wheat were all close to pre-report trade estimates, the biggest surprise was found in the acreage numbers. The survey of U.S. farmers done earlier this year revealed their intent to plant 89.4 million corn acres in 2022, 2.5 million acres less than expected. This is a 4% or 3.87 million acre decrease from last year.

The trade pre-report soybean acre estimate averaged 88.7 million. When the data was released yesterday morning traders were surprised to find a record 91.0 million soy acres are forecast for spring 2022. This is only the 3rd time in history when U.S. farmers have planted more soybean than corn acres during the crop year, the other 2 occasions were in 2018 and 1983. If the early acreage intentions are correct we should expect to find increases of 250,000 or more soybean acres in each of the following states: Illinois, Iowa, Indiana, Minnesota, Missouri, South Dakota and Tennessee. The total forecasted soy acres in Illinois, Kentucky, Michigan, Missouri, Nebraska, Ohio, South Dakota and Wisconsin would be record setting for each of those states.




Ukraine’s agriculture ministry reports that the Russian invasion has blocked off Ukrainian ports along the Black Sea. Because of this Ukraine is in talks with Romania to use their port of Constanta to ship farm exports and regain their $1.5 billion a month in ag exports as soon as possible. In addition to the blocking of Ukrainian ports the Russian military has planted naval mines in the Black Sea which has dramatically increased the risk to vital merchant shipping across the entire region. The “uncontrolled drifting ammunition” have been found and defused off the coasts of both Turkey and Romania. Dive teams from both countries have been involved in defusing multiple stray naval mines around their waters. “London’s marine insurance market has widened the area of waters it considers high risk in the region and insurance costs have soared.” (Reuters)


For the past month we have witnessed the determination of the Ukrainian people to remain under the flag of the country of Ukraine. Ukraine farmers intend to farm their land, even as war rages around them. The article included below was posted online and offers much first-hand insight into the conditions within the nation and obstacles facing farmers as the spring planting window opens.


I would not like to find myself in the place of a farmer now, on whose fields rockets and mines fall every day.


Especially if at any moment hungry Russian marauders in military uniform can come to you and take away your property. Or, for fun, set fire to your tractors and combines. This is exactly what is happening in the regions of Ukraine occupied by the Russian army.

When I planned to write this article about Ukrainian farmers coping with the war for Canadian readers, I first planned to write about those people who work where it is most dangerous right now.


To this end, I called my friend Oleg, whose fields are located in the eastern part of the war — near Volnovakha, in the Donbass.


Today, the city of Volnovakha, after three weeks of fighting, has practically ceased to exist. People say that there is not a single whole house left.


But, unfortunately, Oleg’s phone is silent, as is his social media account. I can only hope that everything is fine with him and his family.


I remembered how a few years ago I called Oleg. At this time, he was building a new house. I was surprised: why are you building a house, investing a lot of money where it is literally 20 km from the front line. Then Oleg replied that this was his native land, and he would not leave it.


But staying on the land in areas under occupation and the threat of war is a difficult and dangerous choice, in the face of Russian aggression.


In a village in the Chernihiv region where my father lives and farms, Russian fascists killed civilians right on the street. The village has since been liberated, and the locals mourn their losses even as they hope for a brighter future.


Challenges abound


First of all, I called Maxim Bernatsky, the head of the Rost-Agro company (Poltava region, central-eastern Ukraine).


Together with his father, Bernatsky is the owner of several farms, the total area of which exceeds 10,000 hectares (nearly 25,000 acres). He is one of the most respected farmers in Ukraine. Maxim is a former schoolteacher who learned agriculture from beginning. Today, all farmers in Ukraine listen to his opinion.


No-till and strip-till technologies are used on Rost-Agro fields. The company produces seeds under its own brand. Here, grain is dried on wood, liquid fertilizers are used, agricultural machinery is repaired independently and the most modern technologies are used.

Bernatsky said while he was finding challenges, he quickly added he was in a better situation than many of his fellow farmers.


“After all, they don’t shoot here, and thanks to the Ukrainian army, we can work in peace,” he said.


“Also in the fall, we checked our agricultural machinery, stocked fuel, fertilizers and pesticides. Therefore, we are ready to go out into the field and sow.”


However, he says, not all farmers have such a good situation.


Farms that are still able to function are currently aiding the war effort and the country’s civilians, he said.


“We are constantly transporting food to big cities, and allocating money to purchase ammunition for soldiers,” he said. “We still have money, but many farmers have already given away everything they had.”


Part of the problem is going to quickly be cash flow, he said. Many Ukrainian farmers saved their grain in storages, primarily corn and sunflower. They wanted to sell this grain in April at the highest price. But now all the ports of Ukraine are blocked by Russian warships. Selling grain is almost impossible.


Even if farmers can find a buyer for grain, they won’t be able to bring it to them. Many bridges have been destroyed, and cars can be fired upon on the road. It turns out that farmers theoretically have money — in the form of grain — but they cannot get it.


Bernatsky complains he cannot deliver seeds to those farmers who have already paid for them — and this is a big problem with seeding looming.


In the longer run he worries about the damage to the nation’s seaports and the destruction that has occurred during their capture and occupation.


Even if tomorrow the ports are taken back, it will take a long time to repair the equipment. This means that the export of grain will only be possible in rail cars to the west.


“This is still unrealistic,” Bernatsky said. “If we can’t sell our grain, then in the fall we won’t have the money to pay people’s salaries and buy resources to work with.”


Bernatsky cannot answer my question about what percentage of acreage in Ukraine will be sown this spring. That depends solely on the Ukrainian army and the military assistance that is lent from abroad.


Another source of mine is Stepan, who runs a 3,000-hectare farm in the Ternopil region of Ukraine.


This is also the still-calm western part of the country, which receives now millions of refugees from the eastern, southern and northern regions. At the same time, in my opinion, the Ternopil region is the most favourable region for agriculture in Ukraine. There are fertile soils and a lot of rain.


Stepan said his farm is a member of a large association of farmers in the region that centrally buy fuel, fertilizers, seeds and pesticides. That structure has been functioning well during these difficult times, and it is also a source assistance between member farms.

Stepan, like other Ukrainian farmers, has already voluntarily donated a lot of money to help the army — going toward products such as body armor, batteries for combat vehicles and other assistance — and toward humanitarian efforts.


“We only think about victory, otherwise we will all be destroyed, all of Ukraine will be destroyed,” Stepan said. “Therefore, each of us is ready to give the last money for the army. But at the same time, we need to think about how to feed people both in Ukraine and in other countries.”


Stepan also managed to stock up on fuel, pesticides and fertilizers in autumn. The main problem for him now is parts for agricultural machinery.


“Now I have to buy all the parts that dealers have, even if I don’t need them now,” Stepan said. “Dealers do their best to give us parts, but there are very few of them.”


He hopes that private business will find new ways to deliver parts for agricultural machinery to Ukraine.


The farm labor force has been exempted, so far at least, from the war effort — a recognition of the strategic importance of agriculture to Ukraine.


“I am glad that the government allows us to leave our machine operators at work and not take them into the army — this is very important,” Stepan said. “Our most valuable capital is people, reliable specialists.”


In the end, Stepan said, the hope of all farmers is a victory for Ukraine in the coming weeks or months.


“Otherwise, we will not be able to sow and grow grain normally,” he said. “This will mean problems not only in Ukraine, but also in other countries.”


— Ihor Pavliuk is an ag journalist working in Ukraine.


Dan Basse, head of AgResource Co. has described the war in the Black Sea region as the greatest supply shock since World War 1, “God forbid we have a weather problem this year”. This war has put about 11% of the annual global caloric consumption supply at risk, ”This is the biggest supply shock that we can find, looking backwards at our data to 1914...” “A war that extends to June would be catastrophic for the spring crops. The question is, can they get it in the ground?” Russia is the global leader in wheat exports and Ukraine is #4 in corn. Basse expects that the uncertainties from the invasion will support grain prices and also fuel further inflation which is now at 7.9% the highest level in 40 years with no end in sight.

AgResource Co. reports, “Our forecast for the year ahead is that combined maybe these two countries will do 20 million to 22 million tonnes of wheat exports. Our estimate is that Ukraine is going to be down around 50%, or almost that at 22 million tonnes of corn production in 2022 with exports also down sharply.”


India and Australia each have large inventories of wheat which can help fill the void created by the war. But the drought that caused significant reductions in total crop production last season in South America, the United States and Canada has tightened grain inventories and supplies are expected to remain tight. “The pipe to export facilities may not be big enough.”

Agribusiness specialists at the investment bank Itau BBA in Brazil report that the upcoming 2022/2023 soybean acreage is expected to increase once again. The past growing season saw a 3.8% increase in soy area bringing total acres to 100.5 million, this next season acres are forecast to only expand by 0.5% the slowest pace in growth in over 15 years. Much of this is a result of the increasing costs involved in converting pastureland into soybean plantations.


Total precipitation through next Friday is shown in the first map below. The maps following show the forecast for precipitation and temperatures through mid-April.







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