WA Grain Growers eye opening Russian Farm tour
- By: "Farm Tender" News
- Cattle News
- Aug 05, 2018
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By Jason Craig
Our annual Grower Study Tour has wrapped up for another year in what has been an eye-opening experience into how southern Russia’s farming and supply chains operate.
A group of 35 Western Australian growers took part in the tour to Krasnodar and Novorossiysk, two key locations in the Black Sea region that are emerging as some of the major powerhouses in the global grain market.
New investment into the Russian agricultural sector, including into its logistics and supply chain, was evident throughout the trip, particularly when you see the significant productivity increases being made, which was important for growers to see and understand what is happening.
As an example, five years ago the Black Sea region was planting 25 million hectares of wheat and today, they’re planting 27 million hectares. Compare this to their crop sizes which has grown from 50 million tonnes to last year’s 85 million tonnes.
It’s a dramatic productivity increase that is being driven by large corporate farmers that are coming into the marketplace and investing heavily on ground. The natural progression of this is that if we see more hectares go in, this could translate to more production.
The pace of growth in Krasnodar was another key highlight of the tour. Growers visited a local farmer, who started farming in 2007 with his father with just 120 hectares. Today, the operation has grown to 8,000 hectares with an annual production of 29,000 tonnes of wheat (with a yield average of more than 6 + tonnes per hectare), 8,000 tonnes of corn, 6,000 tonnes of sunflower, 100,000 tonnes of sugar beet and 2,000t of apples. The farm had 14 headers, more than 20 tractors and 2 spray rigs, and employed 300 people across the business.
While farming operations and practices were sophisticated in Krasnodar, logistics and the supply chain in the area had a few bottlenecks. Growers were taken aback by the more than 200 trucks stopped just outside of Novorossiysk, where the major grain port is located, which had to wait up to a week before being called into port to discharge.
The KSK Terminal at the Novorossiysk port has ballooned to accommodate for growing exports. Built in 2013 to export up to 2 million tonnes, the terminal is now exporting close to 5 million tonnes. Current storage will shortly increase from 100,000 tonnes to 200,000 tonnes, which should see port capacity increase to 7 million tonnes per season.
However, to achieve efficiency the port only exports a few grain varieties with limited grades, which in part dictates what growers in the wider Krasnodar region can plant.
While it was certainly an eye-opening experience for growers, the backdrop to the Grower Study Tour is the reality that the Black Sea region is landing wheat into Indonesia at a discount of around $50 a tonne to Western Australian wheat.
While WA has a lot of quality attributes that are positive, including lower moisture and better colour in wheat however the Grower Study Tour to Russia reinforces CBH’s current program of improving efficiency and reducing costs across our business to ensure that growers remain competitive even when Black Sea’s quality improves.
From the tour, we know the international competitiveness of WA grain is under threat from growing Black Sea competition so the program is essential to ensure we keep grain growing viable for generations to come.
Picture - Novorossiysk Port
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