(Bloomberg) -- Dried out soils in Russia and Ukraine are threatening plantings for next year’s wheat harvest, yet another headache for farmers hit by weather setbacks and the ongoing war.
Swaths of land across the nations, which together account for more than a quarter of all wheat exports, are too dry to plant some crops on. While there’s still plenty of time for conditions to improve and farmers to catch up, the challenges risk shortening the sowing window for winter crops that make up the bulk of their annual production.
Most of European Russia is experiencing “tremendous dryness,” said Dmitry Rylko, director of Moscow-based consultant IKAR. “Farmers were hesitant to sow in the dust.”
It’s an early reminder of potential supply risks for next season. While wheat prices are well below a peak set following Moscow’s invasion of Ukraine, they’ve edged up in recent weeks in part due to Black Sea supply concerns. Ukraine’s wheat output is about a third below pre-war levels after it lost land to the invasion. Russia’s latest crop shrank roughly 10% due to unfavorable weather.
Russian farmers have planted 6.3 million hectares (15.5 million acres) of winter crops excluding oilseeds so far, the lowest for this time of year in more than a decade, according to IKAR. Ukraine’s planted area is about half of what it was this time last year.
Heat and dryness has left some fields too dry, including for other crops such as rapeseed. Temperatures up to 7C above normal in Ukraine and western Russia in the second week of September “exacerbated drought” for winter-crop planting and early growth, according to the US Department of Agriculture.
Ukrainian farm company HarvEast’s land has been too dry to sow winter crops and carry out essential work to prepare for planting, Chief Executive Officer Dmitry Skornyakov said.
“We can be pretty sure of a decrease in rapeseed hectares in Ukraine because the reasonable time to seed it” will soon run out, he said. “Regarding wheat and barley, we still have time.”
The weather issues add to difficult situations for farmers. Regions now occupied by Moscow had been major agricultural producers, while farmers elsewhere in Ukraine have been working despite land contaminated by mines and unexploded ordnance and a shortage of labor due to mobilization. Russia has also experienced a shortage of workers in industry and agriculture due to the war.
Though benchmark Chicago wheat futures are more than 50% below a peak set in 2022, there are signs of tightening supplies. Prices recently touched the highest since June, and the USDA forecasts global stockpiles to be at a nine-year low this season.
Rain this week should aid soil moisture slightly for Black Sea wheat, but much more is needed for a significant improvement to ease worries over dryness, forecaster Maxar said. Still, farmers have until around October or November to catch up with plantings, if the weather improves.
If the European part of Russia gets good rains before mid-October and the weather remains warm, then “it’s not very dangerous yet,” IKAR’s Rylko said.
--With assistance from Olesia Safronova.
(Updates weather forecast in sixth paragraph.)
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