Ukraine War Day #328: Boy Meets Tractor

Dear Readers:

In today’s issue of Pravda, we are going to talk about — what else? — the HARVEST! [little Soviet joke there]. I mean, war is war, but you still gotta eat, right?

So, I have this piece by reporter Olga Samofalova, she covers the Economics beat, and looks to be a perky redhead. The headline reads:

It Is Profitable For Russia To Feed The World

The lede paragraph:

Russia is laying a new historical record for the harvest of grains and wheat. Such harvests have never seen before, not even in Soviet times, when huge swaths of land were under seed. With every year that goes by, Russia increases its world leadership in the export of wheat. While, at the same time, the USA which used to be the leader, is losing its position. In 2022 the Americans sold the least amount of wheat ever in the past 40 years.

Reporter Olga Samofalova

To reiterate: This year’s harvest in Russia is up by 26.7% and is breaking all records, from both Soviet and post-Soviet times. The amount is 153.83 million tons. For wheat alone, the number is 104.44 million tons. That’s a lot of wheat. By comparison, the number for 2021 was 75.94 million tons.

[The fact that Russia is now surpassing the Soviet harvests is all the more significant when you recall that the Russian Federation is not nearly as large as the Soviet Union was, nor does it have as much grain-producing area.]

The other big news being that the Russians are winning hands-down against the Americans (who used to be the breadbox of the whole world), and who had a somewhat pathetic harvest this year. Not that it is completely their fault: America has suffered from drought two years in a row. That happens sometimes. American wheat is also pricier and can’t compete with cheaper wheat of equal quality.

“A tractor in the field is like a tank in the battle!”

Russia is proving that it can feed the rest of the world, while earning nice profits for itself. During the past 10 years the agrarian export exceeded $37 billion dollars. Russia’s share in the global export of wheat consists of 16%.

There are several factors for Russia’s good showing, including outstandingly good weather. But even more importantly, modern technology, which has allowed productivity to increase so much as to more than compensate for the loss of grain-producing regions, after the break-up of the USSR. Technological improvements are particularly noticeable in reducing losses and wastage that might occur during the collection of the harvest. Russia is also using more productive species of seeds, in the main imported varieties. [yalensis: I hope they are not GMO’s, but maybe they are…]

Another factor in increasing export, is the reduction in domestic consumption. In the USSR, up to 70% of the grain produced was used to feed domestic herds, for the production of meat and milk. Whereas in contemporary Russia we have seen a 6-fold reduction in the overall herd of horned cattle, compared with Soviet times: Namely, 41.5 millions of heads of cattle in 1991, compared to 7.2 million heads in 2020. Correspondingly, there is that much more grain to sell abroad.

Russian farmers themselves are very motivated to sell their grain abroad. Once the domestic market is satisfied, there are good profits to be made abroad. World grain prices are high, but at a stable level. Russian grain is popular in the nations of the Middle East, Africa and Asia [yalensis: in other words, the civilized world – haha!], a total of 126 countries who are stable and reliable customers.

The shares of exported grain are as follows: 39% goes to the Middle East, 31% to Asian countries, 20% to Africa, and 7% to the EU. Grain exports have also risen to former Soviet countries such as Belorussia, Kazakhstan, Kirgizia and Armenia.

Is there a down side to such good news? Yes. Neighboring Kazakhstan also had a great harvest this year, and the worry is that the abundance of grain on the world market might bring the prices down too much. Which could cut into the profits of the Russian farmers.

To date, Russian grain has not fallen into Western sanctions, at least nor formally. Although there is still some bickering going on about payments in currency vs rubles, that sort of thing. There are also issues with finding insurers, not to mention some logistical issues. But notwithstanding these annoyances, Russian grain continues to conquer the world market.

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26 Responses to Ukraine War Day #328: Boy Meets Tractor

  1. MrDomingo says:

    Having huge grain harvest is good but it is not much good to have huge harvest of any particular grain, eg wheat, as that could result in market glut and lower prices. I guess the farmers have to make bets on what product will give best financial return next season. What is also important is quality of grain on offer. In the past Russia had problems with quality of grain as there were insufficient facilities for ensuring that grain does not have excessive moisture. One ends-up with grain that may only be good as stock feed. Similar problems with excessive production is seen in production of raspberries. Significant producers are Serbia and Poland but prices market can sustain at times are too low for producers to stay in business. Volume and diversity in production need to be balanced. Being most profitable producer beats being biggest producer any day.

    Like

    • yalensis says:

      Thanks goodness! I really don’t trust those GMOs. I watched too many sci-fi movies where, for example, grasshoppers grow to the size of Godzilla. Due to mad scientists running amok.

      Like

      • Daniel Rich says:

        @ yalensis,

        Nature spent millions/billions of years on providing life to the world as we know today. Although I ❤ technology, I'm also against us meddling in the course of said natural developments.

        Like

      • Montmorency says:

        I’m with you on GMOs or any other manipulation (mRNA anyone?).

        Like

  2. the pair says:

    last comment beat me to it, but yeah…

    https://www.fool.com/investing/general/2014/05/25/is-putin-right-to-call-monsanto-a-terrorist-organi.aspx

    hungary followed suit to a degree:

    https://www.allaboutfeed.net/all-about/mycotoxins/hungary-destroys-acres-of-gm-corn/

    anything agriculture-related in the US usually comes down to subsidies. some farmers are paid to NOT grow crops while the dairy industry would have gone tits up (pun intended) without daddy government giving it an allowance. then there’s the whole corn mess set up by nixon (although the articles blaming it for obesity aren’t too smart about “science” and “nutrition” things).

    https://www.pbs.org/newshour/economy/why-does-the-govt-pay-farmers

    https://www.newswire.ca/news-releases/american-dairy-farmers-depend-on-government-subsidies-673374473.html

    https://www.latimes.com/opinion/la-xpm-2012-jun-27-la-ol-nixon-obesity-epidemic-corn-20120627-story.html

    Like

    • yalensis says:

      Wow! Thanks for the links. I had no idea that GMO was declared terrorist in nature. Or maybe not so much GMO’s per se but Monsanto company. That’s probably a fair assessment.

      Like

  3. NevenA says:

    I’m going to guess that my favourite Ukrainian, Oleksi Arestovych, will feature in tomorrow’s blog post. 😉

    Like

    • yalensis says:

      Oh, you wish, my friend, NevenA. You wish…
      🙂

      Like

    • yalensis says:

      P.S.
      Experiencing severe emotional damage, Stierlitz found a secure line and phoned into his Kremlin handler. “They figured it out, Comrade. They know I’m a spy. I don’t know what to do!”
      Handler: “Get a grip on yourself, Stierlitz, you sound drunk.”
      Stierlitz: “What should I do? What should I do? I got so drunk I ended up in the apartment of a strange girl in a completely different city, and she made me a really dreadful Olivier salad but I was so stressed out I gobbled it up anyhow, then I dutifully washed all her dirty dishes, now she wants to marry me and meet my mom…”
      Handler: “Do nothing. Just continue with the plan. It’s all good…”

      Like

  4. 10 to 1 says:

    ” There are also issues with finding insurers”
    Why is this? Why doesn’t Russia create it’s own insurers, to protect its energy, food, health and what have you, industries which are vital to society?

    Liked by 1 person

    • yalensis says:

      Now that is a very good question. Which I never actually thought about. Russia could create its own insurance companies, no? Or be self-insured? I’m not sure how that works, but I know it happens.

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      • Daniel Rich says:

        @ yalensis,

        Insurance is an algorithmically induced scam. Go claim something, and you’ll find yourself in a minefield of distrust. Nevertheless, Russia should abandon anything set up by western countries, starting with the UN [a building resting on the former fundaments of a slaughter house. Oh, how satirical truth can be :o]

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        • Rich is right. Russia might create an insurance entity, some sort of corporation or government body, but will it be ACCEPTED by everything it needs to be? Will the owner of a shipping port (these have often been sold off to private corporations) say “we won’t let your grain freighter dock here to unload because we don’t trust that you’ll pay up if the thing springs a leak (or is blown up by government-sponsored saboteurs) and sinks”? The refusal being guided by political pressures that are put on the corporate owners… There are thousands of potential chokepoints relating to “insurance” that I won’t belabour, in the interest of not making peoples’ eyes glaze over. At Naked Capitalism (a source I cite way too often) they get into a lot of detail about the nuts ‘n bolts dynamics of how these things work.

          Ultimately, “insurance” is a belief system, like “money.” If people believe your system’s “money” is worth something, they’ll give you real stuff for it, whereas nobody will let me have a stick of gum in exchange for a Bukko Buck™ which has its denomination scrawled in Sharpie on a piece of scrap paper that I pulled out of my pocket. “Insurance” is another way of saying “It’s a big club, and you’re not in it.”

          Like

          • yalensis says:

            I get it. (Sort of.) I think the key is the idea of “brand” and “reputation”. Like, if you were insured by a big brand (say, Lloyd’s of London, or American Travellers), then people might trust it. [Those are maybe bad examples, don’t get caught up in them, you know what I mean!]

            So, maybe the key is for the ALT-civlizations (like Russia-China-India, etc.) to create a big brand of international shipping insurance. Trust might be acquired the very first time they honored a big pay-out.

            Like

            • It can also be a matter of pure political muscle, compounded by finances. “The bylaws of our unloading system for this volatile fuel only recognise insurance issued by Companies A, B, C, X, Y and Z. Others need to be approved by our vetting process, which might take a few years…” “We do not allow uninsured vessels to do business in our nation’s exclusive maritime economic zone, and we only recognise insurance issued by…” You get the picture. They can’t do business because they don’t want to do business, and things like insurance are a fig leaf.

              There’s also the finance angle. N.C. has had explainers about the complicated mechanisms for getting paid for delivery. A ship’s captain doesn’t just sail up to a destination, offload his stuff and get a stack of cash, or a bank cheque printed on fancy paper. Not since the days of tall-mast sailing ships and gold dubloons, at least. There’s an elaborate ballet of guarantors and counter-parties, etc. that has to happen. Any of which can be dicked with by saying “that’s not insured the way we like it.” Plus a whole world of wrinkles which I’m unaware of, since that’s not my scene.

              What it will take is for Russia to develop alternate arrangements with other countries like China, India and the anti-Westies. It seems to be happening, but stuff like that unfolds slowly. Bylaws have to be re-written, contracts signs, all kinds of stuff. That’s why you see stuff about “getting out of the U.S. dollar umbrella.” When it happens, the West will be increasingly screwed. Not because they’ll be refused, but because they won’t have the economic dominance they once had as a more-or-less monopoly provider, and will have to compete on a more equal basis.

              Like

              • yalensis says:

                Yup, that’s what this whole thing is all about. Not destroying the U.S. or West, just placing them on an equal level with other nations, so that they have to actually compete for trade and influence, as opposed to just bullying their way into a dominant position.

                Like

  5. Aule Valar says:

    > yalensis: I hope they are not GMO’s, but maybe they are…

    They aren’t because GMO’s are banned for commercial agriculture.

    That said, the fear of “GMO” Is very irrational. Even with a pretty basic understanding of genetics it’s not hard to see that agricultural selection process is just genetic manipulation with cruder methods.

    The thing is, it benefits all big food capitalists to maintain it. One group reaps hyper profits from marketing their goods as “organic” while the other group maintains monopoly on GMOs because, due to the fears, the industry is so tightly regulated only a handful of established companies can handle it. Everyone wins but the common folk who buy more expensive food.

    Like

    • yalensis says:

      Thanks for that explanation, Aule. It’s true that man has been interfering with nature ever since the dawn of agriculture (breeding new seed types, etc.)
      I just worry more about GMO’s because they take the manipulation to a new level. Might also result in less variety, and sometimes you need variety just in case something changes radically in the environment.

      That said, it’s true that we accept breeding, and using fertilizer, and lots of other unnatural things.

      Like

      • Aule Valar says:

        A theoretical proliferation of genetic modification would definitely result in *more*, not less variety as cultures could be adapted to local conditions with precision. Making some sort of wheat more cold resistant to grow in the North would not make its precursor disappear from the South; it would just make more territories available for farming.

        There is a relatively well known project to create a sort of rice that produces beta carotene. Theoretically growing it could be a cure or at least a relief for vitamin A deficiency that plagues most of the non-Western world. It doesn’t seem to be a trap from what I can tell, it would genuinely help, but thus far the only country that needs it that approved it is Philippines.

        As for “take the manipulation to a new level”… Please don’t take what I say as a cause for more fears, but do you know how modern selection works? They expose seeds to radiation and chemical mutagens to cause rapid mutations and then choose interesting and useful mutants to breed. A significant chunk of food currently grown across the world is grown from varieties created by this method. And it doesn’t technically count as genetic modification so it’s not any more regulated than old school breeding and doesn’t require labeling. And, see, it’s safe despite sounding scary. China is the source of a lion’s share of those, India is as well and Russia is not an insignificant creator. It’s just the logical next step for conventional breeding that allows speeding it up by orders of magnitude. Nobody takes an issue with that. Instead, it’s GMOs viewed as inherently unsafe that’s unnatural.

        I firmly believe that we should not be knee-jerk scared of progress.

        Like

        • yalensis says:

          Thanks, Aule, that is very helpful information, I appreciate your scientific background!
          By the way, I do remember reading once in a scientific journal, there is some species of starchy root vegetable, I don’t remember what it’s called. It’s a staple in some African communities (again, I don’t remember where in Africa, sorry!), this root provides a lot of the peoples calorie needs but is not as nutritious as it ought to be; so they were experimenting with adding more vitamins to it.

          I reckon you’re right that we shouldn’t be scared of this. I mean, for many decades now we have been boosting the nutrition of milk and cereals, and lots of other essentials, with extra vitamins and minerals. If it makes us healthier, then I reckon it’s a good thing.

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