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By Keith Good, Farm Policy News, Reprinted with Permission

Late last week, Bloomberg writers Aine Quinn and Megan Durisin reported that, “After a slow start to the season, Russia’s grain exports are booming as buyers load up on its attractive bumper supplies.

“The country’s shipments of wheat — its main crop — almost doubled in January and February from a year earlier, Logistic OS data show. Buyers shunned cargoes earlier in the season when prices weren’t as appealing, but are now returning as last year’s massive harvest helps Russian grain to rank among the cheapest globally.

Chart of Russian wheat prices over time demonstrating reduction in cost based on huge annual production.

Chart Source: “Russia Wheat Exports Nearly Double What They Were Before War,” by Aine Quinn and Megan Durisin. Bloomberg News (March 3, 2023).

“The recent boom shows shippers have overcome some of the financing and insurance problems fueled by sanctions on Russia. The outlook for exports from the Black Sea is also coming into sharper focus as a deal allowing Ukrainian cargoes to sail through a safe corridor comes up for renewal in about two weeks. Supplies from both nations are helping to stop global food inflation worsening.”

The Bloomberg article also noted that, “While Ukraine’s volumes remain significant, they’re below peaks set late last year. The amount carried out of the Black Sea in February totaled 3.35 million tons and the number of vessels cleared for inspection — a part of the deal — fell for a fourth month.

chart from the Black Sea Grain Initiative showing a slow down in the number of Ukrainian grain ships being inspected under the agreement.

Chart Source: “Russia Wheat Exports Nearly Double What They Were Before War,” by Aine Quinn and Megan Durisin. Bloomberg News (March 3, 2023).

Sluggish Inspectors

“Kyiv has blamed a slowdown in its exports since late last year on sluggish work by Russian ship inspectors, who are one of the parties tasked with checking all vessels sailing under the deal.”

On Monday, Bloomberg writer Keira Wright reported that, “Australia, the world’s second-largest wheat exporting country, is likely to see shipments slump 20% from record levels in the coming financial year as production tumbles because of a shift to a drier climate pattern.

“Exports will probably fall to 22.5 million tons in 2023-24 from an all-time high of 28 million tons a year earlier, while output is set to decrease to 28.2 million tons from 39.2 million tons, government forecaster Abares said. The figure for the harvest just completed is up from 36.6 million tons estimated in December. Planting for the coming crop only gets under way in April.

U.S. SRW wheat futures price chart since March 2022 showing the decline in prices since the Russian invasion of Ukraine.

Chart Source: “Australia Sees Wheat Exports Plunging 20% on Drier Climate,” by Keira Wright. Bloomberg News (March 6, 2023).

Aussie Production Price Cap

“Supplies of the food staple from Australia have helped to cap global prices in the past year after Russia’s invasion of Ukraine choked shipments and sent the grain to a record.”

More broadly on global wheat production, Bloomberg writer Aine Quinn reported late last week that, “Global wheat output is expected to drop slightly next season from a record high as the war in Ukraine and dry weather in Russia takes a toll on crops, the United Nations said.

UN Food and Agriculture Organization chart of global wheat production indicating possible decline in production for 2023/24.

Chart Source: “UN Sees Global Wheat Output Falling for First Time in Five Years,” by Aine Quinn. Bloomberg News (March 3, 2023).

“Production should fall roughly 1% to 784 million tons in the 2023-24 season, the UN’s Food and Agriculture Organization said Friday. That would be the first decline in five years and highlights the risk that global grain supplies still face from Moscow’s invasion of Ukraine.”

Black Sea Corridor Negotiations

In more detailed reporting on the renewal of the Black Sea Grain Deal, Reuters writer Michelle Nichols indicated yesterday that, “United Nations Secretary-General Antonio Guterres will meet Ukrainian President Volodymyr Zelenskiy in Kyiv on Wednesday to discuss extending a deal with Moscow that allows the Black Sea export of Ukraine grains amid Russia’s war in the country.

“‘The Secretary-General has just arrived in Poland on his way to Ukraine,’ U.N. spokesman Stephane Dujarric said on Tuesday, adding that Guterres will discuss the continuation of the deal ‘in all its aspects and other pertinent issues.’”

“The 120-day deal, initially brokered by the United Nations and Turkey in July and extended in November, will be renewed on March 18 if no party objects. Russia has signalled that obstacles to its own agricultural exports need to be removed before it lets the Ukraine’s Black Sea grain deal continue.”

The Reuters article pointed out that, “Turkish Foreign Minister Mevlut Cavusoglu said on Sunday that Ankara was ‘working hard for the smooth implementation and further extension of the Black Sea grain deal.’”

And Reuters writer Pavel Polityuk reported yesterday that, “Ukraine has started online talks with partners on extending the Black Sea Grain Initiative aimed at ensuring Kyiv can keep shipping grain to global markets, a senior Ukrainian government source said on Tuesday.

“The source said Ukraine had not held discussions with Russia, which blockaded Ukrainian Black Sea ports after its invasion last year, but that it was Kyiv’s understanding that its partners were talking to Moscow.

“‘The situation with negotiations is rather complicated. Now a lot depends not on us but on the partners,’ said the source, who spoke to Reuters on condition of anonymity.”

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Recent news and highlights from around the U.S. wheat industry.

Speaking of Wheat

“The Russian naval blockade of Ukrainian ports has already shredded global chains of food supply. Adding insult to injury, Russia steals Ukrainian grain and bombs Ukrainian granaries. Russia is essentially playing hunger games with the world by keeping the naval blockade of Ukrainian ports with one hand and shifting the blame for it on Ukraine with the other hand.” –Ukrainian Foreign Minister Dmytro Kuleba. Read more here.

Best Wishes to Director of Communications Amanda Spoo

All of us at U.S. Wheat Associates (USW) and across the U.S. wheat industry want to thank Amanda Spoo (above) for her work on behalf of wheat farmers over more than 7 years on the USW Communications Team. Among the many highlights of her time with USW, Amanda managed a major overhaul of www.uswheat.org and built USW’s social media into a highly effective channel to overseas customers and friends at home. More importantly, she has been a respected colleague who made our work more fun. Vice President of Communications Steve Mercer and all Amanda’s colleagues wish her well as she moves on to new opportunities back in her eastern Oregon home.

Director of Communications Position Open

USW has an opening for a Director of Communications in a hybrid work environment based in its Arlington, Virginia, Headquarters Office. The Director of Communications reports to the Vice President of Communications and helps USW fulfill its mission by working collaboratively to plan and implement producer-focused and market development communications across a range of media; by managing all digital communication touchpoints, including content creation, deployment across the website, social media, email marketing, and other media channels, and performance analysis; and other critical domestic and international communications activities. The job description and application process are posted here.

USDA/FAS Welcomes New Foreign Service Officers

U.S. Department of Agriculture (USDA) Deputy Secretary Dr. Jewel Bronaugh recently administered the oath of office to 14 USDA employees who will serve American agriculture internationally as members of the Foreign Service. The diplomats begin their careers as agricultural attachés at U.S. embassies and diplomatic missions on five continents, where they will monitor and report on global agricultural production and trade, identify export opportunities, enhance food security and support U.S. foreign policy objectives. Read more here.

Middle East, North Africa Trade Team in the U.S.

Matthew Weaver of Capital Press reported trade team of flour millers from Morocco, Algeria, Egypt and Oman began their tour of the U.S. last week in Idaho. “These are young flour millers, a young generation (representing) their family businesses,” said Tarik Gahi, assistant technical director for U.S. Wheat Associates in the Middle East and North Africa region, based in Casablanca, Morocco. “They are 22, 24, 25 years old, just out of the university and they are supposed to take the lead in the coming years.” The tour will allow the millers to become familiar with U.S. wheat classes, marketing and the entire wheat system compared to wheat from other origins, Gahi said. Read more here.

2022 Hard Spring Wheat and Durum Tour

The annual Wheat Quality Council Hard Spring Wheat Tour is scheduled for July 25 to 28, 2022. The tour will provide the first production estimate for the 2022 U.S. hard red spring and durum crops. Tour information and registration are posted here. Customers can follow the tour in real-time by following #wheattour22 on Twitter and keep up to date on the entire U.S. wheat harvest with the weekly USW Harvest Report.

Subscribe to USW Reports

USW publishes various reports and content available to subscribe to, including a bi-weekly newsletter highlighting recent Wheat Letter blog posts and wheat industry news, the weekly Price Report, and the weekly Harvest Report (available May to October). Subscribe here.

Follow USW Online

Visit our Facebook page for the latest updates, photos, and discussions of what is going on in the world of wheat. Also, find breaking news on Twitter, video stories on Vimeo, and more on LinkedIn.

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As an export market development organization, U.S. Wheat Associates (USW) represents the interests of U.S. wheat farmers in overseas markets. We are happy to compete fairly with wheat farmers in other countries on the basis of functional quality and value. Yet, working for these hard-working farm families also gives us great empathy for wheat farmers everywhere.

As the U.S. winter wheat harvest rapidly progresses, our thoughts include Ukrainian farmers as they try to harvest their wheat amid the unimaginable challenges of an armed invasion of their lands. There is growing evidence that Russian forces are deliberately targeting ripe winter wheat fields. The Washington Post also reported that in recent fighting in the east devastated a large flour mill and grain elevator.

Failed Strategy

Targeting wheat fields and other agricultural infrastructure is also an attempt to demoralize the Ukrainian people, but that will be a failed strategy.

CNN and its reporter Ivan Watson recently showed why frontline Ukrainian wheat farmers vow never to give up.

“Military drone footage exclusively obtained by CNN shows Russian artillery pounding wheat fields, burning the summer harvest charcoal black,” Watson reported, as wheat farmers race to protect their crops. “Despite the threats, these brave farmers still bring in their harvest only to face another obstacle. [They cannot] sell wheat because the Russian military has blockaded Ukraine’s ports, so there is no way for this to be sold except at an enormous loss.”

German media company Deutsche Welle (DW) recently reported that Ukraine’s infrastructure minister accused Russia of “terrorism,” saying Moscow is “holding people all over the world hostage” by blocking the country’s grain exports. Putin wants to force the international community “to take off some of the sanctions and then the grain can get out,” he said.

A Ukrainian wheat farmer talks to CNN reporter Ivan Watson

Never Give Up. In spite of Russian strikes on his wheat fields, this Ukrainian farmer told CNN his country, its soldiers and the world need his crops. CNN Image.

Why We Keep Working

As a combine operates in the background, CNN’s Watson asked a Ukrainian wheat farmer to explain why he continues his work.

“Our soldiers are fighting and dying to get rid of these occupiers,” the wheat farmer said. “We need to feed our country, these soldiers, and help the whole world with our food. That is why we will keep working.”

The world is fortunate to have wheat farmers like this man and other Ukrainian farmers willing to do everything it takes to help feed us all.