An Urban's Rural View

We read a lot these days about Russia -- its meddling in American elections, its intervention in Syria, its invasion of neighboring Ukraine. We read less about Russia's agricultural exports. They make few headlines.

Yet, over the last four marketing years Russia's wheat exports have risen 50% to 27.8 million metric tons, overtaking the European Union to become the world's largest wheat exporter (http://tiny.cc/…). USDA predicts Russia will lead the world in wheat exports again in the current marketing year.

While wheat is Russia's world-beating crop, it's not the country's only big one. "Russia Is an Emerging Superpower in Global Food Supply," declares a Bloomberg column by Leonid Bershidsky, who from 1999 to 2002 was the founding editor of the Russian business daily Vedomosti (http://tiny.cc/…). By Bershidsky's reckoning, Russia is also a "leading exporter of corn, barley and oats."

Oil is Russia's leading source of export earnings, but Bershidsky thinks it's possible grain could eventually replace it. He cites the boost the country's farm exports can expect from growing global grain demand and climate change. The northward movement of higher temperatures could, he writes, allow Russia (and to a lesser extent Ukraine and Kazakhstan) to reclaim 140 million acres of cropland that fell into disuse between 1991 and 2000. The RUK, as the three countries are known in grain-marketing circles, are "increasingly shaping global grain markets."

Bershidsky even sees reason for optimism in the RUK's relative backwardness. The countries lag the West technologically? That gives them room to introduce new yield-boosting technology. They have "regulatory inefficiencies?" They can be fixed. The RUK have high growth potential because they start from a low base.

Granted, some of this seems to border on wishful thinking. Don't assume, though, that Bershidsky is an unreflective pro-Russian nationalist. His relationship with his native land is complicated. When Russia annexed Crimea in 2014, he emigrated to Germany.

That said, there are reasons to question the "Emerging Superpower" label. Consider Bershidsky's claim that Russia is a "leading exporter" of corn, barley and oats:

-- Russia's corn exports have, it's true, jumped 42% in the last five years. But USDA's forecast for the 2017-18 marketing year still ranks it only 11th in the world -- 16.5 mmt. By comparison, the U.S., which ranks first, exports 360 mmt.

-- Russia is, indeed, a strong contender in barley exports, ranking fourth behind the European Union, Australia and Ukraine in USDA's forecast for this marketing year. But barley is a relatively minor crop compared to corn or wheat. While Russia and Ukraine would rank No. 1 if they were one country, their combined total exports only add up to 8.2 mmt.

-- Russia's 10,000 metric tons of oat exports is enough to rank seventh in the world, but that's also not saying much. The leading country, Canada, exports 1.8 mmt. The U.S., hardly a major player in the international oats game, exports three times more than Russia.

-- For the heck of it, let's look at rice. As a rice exporter, Russia ranks 16th in the world. The U.S., fifth behind India, Thailand, Pakistan and Vietnam, exports nearly 18 times more than Russia.

In sum, Russia is a "leading exporter" of crops other than wheat only in the sense that it's on the USDA's lists. Except for barley, it's not even one of the top five on those lists. It has the potential to export more, but it has a long history of performing below potential.

Bottom line: Wheat superpower, no question. Barley superpower, maybe. Other crops? Not so much.

Still, Bershidsky's column is a timely reminder of the growing competitiveness of the ag-export environment. Increasingly it's not just Brazil and Argentina that American farmers need to worry about.

Urban Lehner can be reached at urbanize@gmail.com

(ES)

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