Since 2005-06, Russia, which was a net wheat importer at the turn of this century, has nearly doubled its wheat production from 44.5 million tonnes to the forecast 85 million in 2017-18 and more than tripled its exports from 10.6 million to 36 million during that time. Its export share has jumped from 1% in 2000 to 18% in 2016-17.
This hasn’t occurred by accident. With its biggest industry — oil — in steady decline, the Russian government has made self-sufficiency in agriculture a high priority in recent years. A weaker ruble has led to more expensive imports and cheaper exports, making a boost in agricultural production and exports a winning strategy for a country that comprises 11% of the world’s land mass and has great potential for agricultural expansion.
But the Russian renaissance in agriculture isn’t just limited to wheat, as this year’s Alltech Global Feed Survey, released in late January, revealed.
While the report’s headline was that global feed production topped 1 billion tonnes for the second straight year at a record 1.07 billion tonnes, closer inspection shows the most eye-opening development was Russia’s one-year leap from the world’s No. 7 feed producer to No. 4.
“Russia has been the story for us this year,” noted Alltech’s Aiden Connolly. “There is a desire clearly from President Putin to focus increasingly on self-sufficiency and he wants to see that in broilers, eggs, milk and pork to replace imports with local production.”
Not coincidental with this growth was the launch of the National Agricultural Development Program 2008-2012 and the follow-up State Program on Agricultural Development that runs through 2020, both of which have been credited with spurring major expansion in Russia’s poultry and pork output.
Boding well for future feed production was a report from the Livestock and Breeding Department of the Russia Ministry of Agriculture forecasting 1-million-tonne-per-year growth for the meat and poultry sectors through 2020. And projecting out even further, the Russian Feed Union forecasts that by 2025 feed for poultry will grow by 29%, feed for pork will increase by a whopping 61% and feed for livestock is expected to jump by 50%.
The government will continue to have a stake in this growth as it is currently co-financing 77 feed production projects with a contribution of 5 billion rubles ($85 million) of the total cost of 22.3 billion rubles ($376 million).
Russia’s road to self-sufficiency in agriculture as well as being a global leader in agricultural exports isn’t without its potential bumps and detours. The country’s aging infrastructure, particularly when it comes to agricultural transportation, is years behind many of its competitors, and a strengthening of the ruble or some other economic shift could also slow the country’s ability to export.
But as things stand today, it’s hard to imagine Russia not continuing to strengthen its position in the global grain and feed sectors.