The key driver for the development of the grain market in Russia is the yield growth, which over the past 5 years rose by 23% and reached 28 hundred kilograms per hectare (dt/ha), said Dmitry Zhilyakov, Head of the Department of Industry and Technological Expertise of RusAg, at the panel discussion "Grain Market" of the Golden Autumn exhibition. The main feature of the industry in the last 15-20 years has been an outstripping growth in the efficiency of grain farming, primarily in regions with a high share of large businesses. For example, in the Black Earth region, the average yield has doubled.
“Over the past 20 years, the grain yield in the Central Black Earth Region has more than doubled, and in the Rostov Region and Krasnodar Territory grew by 40-50%. The average grain yield in the Kursk and Belgorod regions came close to the leader – the Krasnodar Territory, whereas 15-20 years ago the efficiency of grain farming in these regions was 1.5-2 times lower,” said Dmitry Zhilyakov.
The Krasnodar Territory held the first place in terms of yield with a result of 56.6 dt/ha, however, other regions are approaching it due to faster growth rates, and among them not only the Black Earth Region, but also the Bryansk Region with an increase in the average yield over 5 years of 212%, as well as the Penza Region with an increase of 125%.
Change in grain yield in leading regions, dt/ha
|
Region / Territory |
Average yield in 5 years, dt/ha |
Growth rate |
|
|
2000-2004 |
2016-2020 |
||
|
Bryansk |
15.6 |
48.66 |
212% |
|
Kursk |
21.8 |
52.04 |
139% |
|
Penza |
14.26 |
32.04 |
125% |
|
Belgorod |
25.12 |
50.76 |
102% |
|
Tambov |
19.44 |
38.32 |
97% |
|
Lipetsk |
24.76 |
44.4 |
79% |
|
Orlov |
23.54 |
42.04 |
79% |
|
Voronezh |
21.62 |
37.52 |
74% |
|
Rostov |
23.7 |
36.34 |
53% |
|
Krasnodar |
39.84 |
56.6 |
42% |
According to Dmitry Zhilyakov, “the key factor in the growth of yields in the Central Black Earth Region and other regions was the introduction of modern equipment and cultivation technologies by agricultural holdings. In large business companies, the yield of grain and other crops is 20-30% higher than the average for the region.”
Increasing the efficiency of crop production increases the investment attractiveness of the industry, including in the formation of land banks. RusAg notes the high activity of agricultural holdings in crop production: over the past 10 years, the share of land in their ownership has doubled and amounts to 40%.
According to the results of the 2020/2021 season for row crops, the top-3 leaders in gross revenue with a significant gap from other regions are the Krasnodar Territory (RUB 280 billion), the Rostov Region (RUB 239 billion) and the Voronezh Region (RUB 156 billion).
At the same time, in terms of revenue per 1 hectare, the Kursk Region is in first place (RUB 94 thousand), the Krasnodar Territory is in second place with a result of RUB 84 thousand per hectare, the Belgorod Region took third place with RUB 81 thousand of revenue per hectare.
Grain crops remain the mainstay of row farming in Russia, with their share in acreage accounting for 67% and revenue for 61%.
Export-oriented approach
Due to the stabilization of meat production and stagnation in flour consumption the domestic grain market has lost its status of a growth driver to exports, whose share in the balance of grain use has not dropped below 40% for the past 5 years.
At the same time, almost all “free” grain is exported due to the development of transport infrastructure (ports).
A number of investment projects are currently underway to improve logistics capabilities with a total capacity of 25 million tons in the Azov-Black Sea basin and the Baltic Sea. Their implementation will increase the total volume of grain terminals to 80+ million tons, which will double the current export volume, added Dmitry Zhilyakov. The surplus of export capacities will increase the influence of the global market on the domestic grain market.