View from the East

By Dr Keith Dawson

As I write, we have just completed our protein pea harvest with field yields acceptable in Ukraine at just under 3.5 tonnes per ha.

When I visited Ukraine three weeks ago they looked better than that, but continued dry conditions took the final edge off them. These dry conditions have been widespread throughout continental Europe.

Last week, I witnessed premature ripening in both wheat and oat crops in central Sweden. In Western Ukraine, we received some rain, but nowhere near enough and yields generally are down in the worst dry spell for 20 years.

Grain yields are, so far, down significantly on five-year averages, as are drilled areas. Yields are now rising in both Russia and Ukraine as less droughted areas are cut.

The lack of export pathways for significant wheat exports hit local prices here very heavily, with prices of as little as $70 per tonne off the combine. This has risen now locally to $150 pert tonne and rose further briefly due to last week's Black Sea export agreement.

However, it was an agreement that lasted only 24 hours before Russia attacked Odessa port with missiles. Mykolaiv has also been hit.

Russia has much less to gain than Ukraine from the deal. How does this fit with Russia's stated aim to capture the South-west along the coast?

I believe it's important to frame this conflict and use the right words. This is not a Ukrainian war, or food crisis. This is a Russian war and global food crisis.

Russia is now a terrorist state. FAO figures show global food price indices up by 65% from 2020, all due to unwarranted Russian aggression and lies. The World Food Programme estimate this has driven around 50m people into 'acute hunger.'

A few meagre boats out of the Black Sea will not solve this.

Storing grain will be a better option for some, but farmers need cash to sow next year's crop – starting this week. As preparation and decision-making for harvest 2023 takes place, around 20% of harvest 21 still remains in Ukraine, dragging the harvest 22 prices down.

The BBC reported that around 30% of the Ukrainian harvest could head west by train. I would be surprised if it were more than half of that, with the problems of storage and transhipment from one gauge of railwagon to another at the border with EU.

There are 12 rail crossings for goods trains between Ukraine and its five western neighbours – Poland, Slovakia, Hungary, Romania and Moldova.

It's a logistics nightmare shifting wagons, or their loads from broad gauge tracks, 1.52m wide (the old Soviet Union gauge) to the narrower European gauge of 1.43m wide.

Infrastructure, rolling stock, personnel and conveyors are all playing a radical and costly game of catch up.

Much is being made of both northern Baltic routes and out to sea via Constanta in Romania, but rail links are needed, or 5m lorry journeys for remaining 2021 and now 2022 harvest volumes!

It would take around 400 Handymax bulk carrier ships just to clear the 2021 Ukrainian harvest backlog, let alone 2022! Much is being valiantly done, these are valuable pathways, but they can only take a fraction of the previous Black Sea routes.

Constanta is still the major hub for other nations in the area and has little spare capacity for Ukraine. It already exports twice the volume that Odessa did at 65m tonnes.

There is much wishful and hopeful thinking here, despite best efforts, as there is with reopening significant flow of Ukrainian grain through Odessa. This despite the many meetings between Turkey, Russia and latterly Ukraine.

Finally, an agreement was signed on July 20. To my mind, this is more about posturing and propaganda by Russia for African allies, and to an extent Turkey, than major flows in the short or even medium term.

There is no doubt that Western sanctions have driven Russia to the table to allow exports of Russian food and fertiliser. The UN efforts have been key, but Gutteres' optimism was answered within hours by Russian missiles, as it was on his previous visit to Kyiv.

Fertiliser and grain were never embargoed, but as noted previously, it was insurers not willing to take the risk. Will they now? We shall see, but volumes are unlikely to be huge nor immediate.

There is a risk for Ukraine in opening shipping lanes from Odessa of a Russian seaborne attack. The new Harpoon ordnance provided by the West has reduced this risk. Can the Russians be trusted not to breach this UN brokered agreement?

The effect on Western prices may be greater than the volumes transported, as optimism exceeds reality?

A significant number of Ukrainian farmers will not sow in the coming weeks, awaiting unfolding of events. They may not autumn sow at all for harvest 2023, awaiting the spring when things may or may not be clearer?

This is a long haul. This may bode well for Scottish growers increasing their oilseed rape showings, as I suggested last autumn.

This is the first crop to be sown in Ukraine and the appetite for autumn sowing action is severely tempered by market and cash availability. Remember.

Ukrainian and Russian winters come in hard and fast and current dry seedbeds are not conducive to a well heeled OSR crop entering the harsh steppe winter. A weak rape crop does not look a happy sight come the spring on these cold blasted plains. A big heap still wins, especially with higher prices.

Fortunately, our business in Ukraine is focused on potatoes and starch currently, and prices and contracts have been kinder for this spring sown crop.

Our stores are now empty and our local team have worked wonders in getting our potato starch factory up and running. It has had a good first 'trial' campaign season and due to war conditions has produced three times the starch volume initially forecast.

Starch prices are now on the rise and along with getting the factory up and running during a war, they have also just received the necessary accreditation to export to the EU. Not an easy task.

Their efforts and 'can do' attitude and passion for the business has been humbling. The support and good will of our investors has also been a huge fillip.

Meanwhile, in this new era of tenuous food security, there is continuing debate about planting the Highlands, and Lowlands with trees to sequester carbon. There are signs of more common sense from the Scottish Government and a slowing down of the fevered Klondike boom in land prices and deals to down hoof and up spruce.

It's important that such decisions are based on facts and evidence, especially when huge sums of hard earned taxpayers' money are involved. A great piece of work from the James Hutton Institute and University of Stirling has shone an illuminating searchlight on the matter.

They have clearly shown that for the first 40 years at least, it is better leaving heather well alone on upland organic soils, rather than planting with native broadleaved trees. The heather sequesters just as much carbon as the trees.

It is interesting to note that in the current cost of living crisis hitting so many, that organic sales are dropping heavily. Hardly surprising, with the gouging premiums charged and more rapid spoilage.

Organics have not only caused a food catastrophe in Sri Lanka, as well as its $1bn tea industry, but are experiencing problems throughout Europe. They will not provide food security, nor real sustainability.

I have always maintained that the purse, or wallet is a more powerful indicator of preference and intent than clipboard questions asked about buying intentions. As ever, follow the money.

It was very interesting to visit the recent AHDB demonstration at Balbirnie, in Fife, last month. In times of volatility and uncertainty some will clutch at straws.

Fertiliser prices have driven some spectacular wrong thinking and commercial opportunism. News on fert plant shutdowns by BASF will increase price and reduce supply.

There are some sound principles behind parts of 'regen' farming, for example soil health, crop rotation, building OM and minimum tillage, all linked. Most have already been adopted by progressive farmers.

Sadly, there is also some unproven nonsense and significant increased risk. Both wheat and chaff.

Chaff? The replacement of basal prilled N fertiliser with later urea sprays was shown to be less effective decades ago. This is due to ammonia volatilisation from the leaf.

Expensive humic and fluvic products added will not improve N targetting, nor allow significant reductions. They will merely line the pockets of those who sell them, as did seaweed sprays before them.

The use of unproven sap sugar tests to target nutrient and pH correction will not add to efficiency, but do provide a snake oil remedy for the unwary.

Carbon per unit of food, not per ha is the way forward. A big heap still wins by this parameter.

Soil organic matters take years to build up as we have seen in our truly regenerative farming in Ukraine. 'Startling' increases in organic matter in a couple of years are much more likely to be down to sampling, or analytical error than real soil enhancement.

At current prices, the admitted yield reductions from full on regenerative farming will leave a big gap not only in farm incomes, but also food security.

A recent meta analysis of 30 long-term 'regenerative' farming trials showed benefits only at low N rates, not higher N rates. Slightly higher fert N replaced the extra management and risk of full-on regen.

Adopting the sensible parts of regen – as many, including us, already have – and rejecting the whacky nonsense is the best strategy. We were talking about many of these good options two or more decades ago with SNH's TIBRE programme and LEAF.

Arable Scotland was more science based, as will be Potatoes in Practice, at Dundee, on August 11. Changes must be based on facts and evidence from independent, scientifically rigorous field plot trials, not a few large blocks in a field open to other influences. There is too much at stake.

It's very interesting to note that there are very, very few now extolling the virtues of Brexit, not even the oxymoron that is the Minister for Brexit Opportunities.

We are now seeing the 'remaining' two UK protagonists for PM, unwisely claiming they are the only people capable of clearing up the mess. A mess they, themselves, have created over the last decade or so.

So good are the trade deals that have been negotiated that the Government has blocked scrutiny of them. All of them will damage UK farming.

It is becoming clear now that Brexit was more about one-upmanship between two Old Etonians, in a throwback to their Oxford Union days, than a genuine attempt to improve lives, trade, freedoms and the economy. It has very clearly done the opposite.

Brexit is not 'Done' but 'Broken'. Project Fear is now Project Here as unfilled vacancies on farm and in hospitals and queues at ports and airports testify.

Resorting to breaking agreements and laws, to get around a bad deal done in a hurry for short-term electoral advantage, says it all. What a legacy of broken promises and deception the departing PM leaves behind and what a poverty of talent is vying to replace him.

With a winter of higher fuel, food and fert prices and likely gas rationing, we need strong, honest, trusted, intelligent and innovative leadership. Judging by TV 'debates,' that seems in short supply ... sadly.