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Ukraine Anticipates Lower 2023 Grain Harvest, Kansas Wheat Conditions Improve

Reuters writer Pavel Polityuk reported yesterday that, “Ukraine’s 2023 grain harvest is likely to fall to 44.3 million tonnes from 53.1 million in 2022 as less acreage is sown due to the Russian invasion, a forecast by the Ukrainian agriculture ministry showed on Monday.

“The crop could include 16.6 million tonnes of wheat, 21.7 million tonnes of corn and 4.8 million tonnes of barley, the ministry said.”

“In 2022 Ukraine harvested 20.5 million tonnes of wheat, 25.6 million tonnes of corn and 5.6 million tonnes of barley. It harvested a record 86 million tonnes of grain in peaceful 2021,” the Reuters article said.

Polityuk added that, “At the same time, gross production of oilseeds is expected to increase to 19.2 million tonnes this year from 18.2 million tonnes in 2022 due to a larger sowing area for the more lucrative crop, according to the ministry forecast.”

Also yesterday, Wall Street Journal writer Alistair MacDonald reported that, “Ukraine expects its farmers to harvest up to 15% less grain this year than last, showing how the war is further hindering one of the world’s largest agricultural exporters.

“With Russia’s invasion continuing to disrupt exports, some farmers have switched to crops that are easier to get out of the country, like sunflower seeds and soy, Mykola Solskyi, Ukraine’s minister of agrarian policy and food, said in an interview.

“The war severely curtailed Ukraine’s globally important agriculture industry throughout last year, contributing to a rise in food prices, and Kyiv expects disruption to continue.”

The Journal article explained that,

The shift among farmers means that, allowing for normal weather, production of corn, wheat and other grains is forecast to be 10% to 15% less in 2023 than last year, Mr. Solskyi said.

“Ukraine’s grain harvest last season was 53 million metric tons, a 20% reduction from the average over the past five years, according to the Ministry of Agrarian Policy and Food. The country’s combined harvest of all grain, sunflower seeds and soy came in at 63 million metric tons, a 52% drop compared with the previous year’s output.

“Cargill Is Optimistic Landmark Ukrainian Grain-Export Deal Will Be Renewed,” by Tarso Veloso Ribeiro and Isis Almeida. Bloomberg News (March 6, 2023).

“Ukraine’s grain exports had picked up toward the end of last year to near prewar levels, partly thanks to the Black Sea export deal with Russia. Both countries on Friday agreed to extend the deal, which had been due to expire at the weekend.”

Meanwhile, Reuters News reported yesterday that, “Russia laid out conditions on Monday for agreeing to any further extension of the Black Sea grain deal, and President Vladimir Putin said that Moscow could send free grain to African countries if those conditions were not met.

“The deal, allowing the safe export of grain from Ukrainian and Russian Black Sea ports, was renewed on Saturday for 60 days – half the intended period – after Moscow said any further extension beyond May 18 would hinge on the removal of some Western sanctions.

“Russia’s foreign ministry, in a statement posted on its website on Monday, said Moscow had decided to limit the extension of the deal to 60 days over what it called ‘a lack of progress… on normalisation of domestic agricultural exports.'”

Also yesterday, Dow Jones writer Kirk Maltais reported that, “Wheat futures led grain trading lower, with the terms for the length of the Black Sea export agreement extension murky – with Russia claiming the extension is only for 60 days while Ukraine said it’s for the full 120 days.”

And today, Reuters News reported that, “Chicago wheat futures lost more ground on Tuesday after a weekly U.S. government report showed improvement in the condition of winter crop which had been hit by dry weather.”

The Reuters article added that, “The U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service in a weekly crop report on Monday rated 19% of the winter wheat in top producer Kansas in good to excellent condition, up from 17% the previous week.

“Approximately 53% of U.S. winter wheat is produced in an area currently experiencing drought, the USDA said last week, a reduction from 55% a week earlier and down from 69% as the year began.

With respect to U.S. crop exports, Dow Jones writer Kirk Maltais reported yesterday that, “Export inspections for U.S. grains were higher across the board for the week, the U.S. Department of Agriculture said.

“In its latest grain export inspections report, the USDA said corn export inspections for the week ended March 16 totaled 1.19 million metric tons, up from 1.02 million tons last week. Soybean inspections totaled 716,618 tons for the week, up from 633,367 tons last week, and wheat totaled 374,224 tons, up from 256,901 tons last week.

Corn inspections remain 36% behind last year’s pace, while soybean inspections are 3% higher and wheat inspections are nearly 2% behind.”

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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