Friday, November 23, 2012

Russian Grain

One of my worst predictions was that after the breakup of the Soviet Union, Russian grain would flood the market as their agriculture improved, driving world prices down.  Generally speaking that's not happened.

There's a Russia Today advertising section included with one of my newspapers pretty regularly.  It seems it's put out by a Russian organization: Russia Beyond the Headlines, at  I'm not sure of who's behind the organization, but many of the articles seem pretty factual and objective.  Here's a recent one on the Russian grain situation.  Three paragraphs:
Russia has almost 300 million acres of arable land, about 50 million acres of which require time to recover after being out of service for some time. The minimum yield is about 1 ton per acre, which by European standards is next to nothing.
Therefore, even assuming minimum yields on all of the 300 million acres of arable lands, Russian land can produce 300 million tons of crops annually, with cereals accounting for two-thirds of the total. This means that Russia is capable of producing 200 million tons of grain annually.
With domestic consumption at around 80 million tons a year, Russia would have more than 100 million tons of spare grain that could be exported. To compare: Last season, the United States –  the global leader in grain exports –  exported 73 million tons of grain, with Argentina ranking second at 32 million tons. Australia and Ukraine each exported 24 million tons of grain, while Russia and Canada sold 20 million tons.

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