Let's grow more vegetables in the open field - with this motto this year almost every region of Russia approaches the sowing season. Against this background, do seed suppliers notice a rush demand for their products?
What varieties and hybrids are most popular with farmers? Are there any difficulties with supplies under the sanctions and what changes in the market should be expected in the near future?
We are talking about all this with Evgeny Medvedev, General Director of PRESTIGE AGRO LLC.
PRESTIGE AGRO LLC has been selling seeds from the best European and Russian breeding centers for more than 20 years.
– Evgeny Vladimirovich, can we say that your company sold more vegetable seeds this year? Will there be plenty of vegetables in the fall?
– It all depends on which year you want to compare. If we compare the sales volumes of this season and the last one, then there is indeed an increase, and it is significant. But according to my feelings, 2021 was the year in which the reduction in the area under the vegetable group reached its maximum over the past 10 years. That is, the fact that now more vegetables will be planted than a year ago does not guarantee that we will receive surplus production in the fall.
– What caused the reduction in space in 2021?
- This is the result of changes that have occurred in the market over the past 10-15 years.
I think many people remember how, since the early 2000s, the very essence of selling agricultural products began to change in Russia. In those years, retail chains were actively developing, and goods from the markets gradually moved to chain stores. Approximately in 2010, the turning point came when retail chains began to play a greater role than markets in the total sales of vegetables of the borscht group. During this period, large holding structures began to show interest in growing vegetables and potatoes. Agroholdings quickly set up production, while occupying the niche of medium-sized farms. But then each large agricultural enterprise went its own way, many of them diversified production: someone focused on growing raw materials for chips or french fries, someone switched to cereals or some other crops. Since 2017, we have observed an annual loss of space in the borscht group. Let me give you a specific example: among our clients there is a large company specializing in the production of potatoes and carrots. At the peak of interest in vegetables, they grew carrots on an area of 380 hectares, but since 2017 they have gradually reduced the volumes. Last year they allotted 70 hectares for carrots, the difference is more than five times!
- And this is the situation for all vegetable crops of the borscht set?
- To a greater extent this applies to root crops. Separately, I would single out only cabbage. Agroholdings were ready to work with potatoes, carrots, beets, in rare cases, onions - that is, those crops that are suitable for mechanized harvesting. Few of them undertook to grow cabbage. As a result, few people produce it at all, and now it is this crop that is in the greatest deficit on the market, prices for it are growing the fastest.
“This year has been very difficult for seed suppliers. Farmers note the lack of certain hybrids in the market. What are the reasons for the shortage?
– There were indeed problems with the supply of certain hybrids, and in some cases we had to select alternative options for replacement. One of the main reasons for the shortage is the pandemic. In 2020, on a wave of panic, large European companies closed part of the seed sites. As you know, the production of seeds of most crops takes two years, in the first year a mother plant grows, in the second year seeds appear. In 2021, fewer seeds were harvested, and this led to difficulties. I hope that next year the production volumes will be restored, last summer the seed-growing sites were already more or less working.
If we talk about the situation on the seed market in the whole country, then this year the problem of the shortage of carrot seeds has become especially acute. About a year ago, the Rosselkhoznadzor introduced additional checks of imported batches of carrot seeds for the presence of the bacterium Candidatus Liberibacter solanacearum (the causative agent of Zebra chip disease). As a result, part of the production did not enter the Russian market, which aggravated the shortage situation. This situation did not affect our company directly, but new customers came to us who could not buy seeds from other suppliers.
Of course, none of our new or regular customers was left without planting material, but the season - taking into account all of the above, as well as the slippage of logistics and payments - was not easy.
– Customers were not scared away by new prices for seeds? I think you were forced to raise the cost of products due to the jump in exchange rates?
The prices were raised, but have already been lowered. We have been working with customers for years, there is no desire to cash in on them. Yes, we had supplies that hit the peak of the rise in exchange rates, and we were forced to sell these lots much more expensive. But those seeds that were brought to Russia before February 24, we sold without extra charges.
At the moment, in our assortment there are still positions that are expensive - from among those that came to us in early March. But if you display the "average temperature in the hospital", the changes in prices are negligible.
At the same time, there is an understanding that next year they will inevitably grow. Let's start with the fact that inflation is accelerating not only in Russia, but also in Europe. For many years, inflation in European countries remained at the level of 1-2%. Most companies raised prices every two years, by the same 2%, and for our suppliers the difference was imperceptible. Now, according to official data, inflation in the euro area is in the range of up to 12%, and it will be impossible not to pay attention to such an extra charge.
Secondly, logistics is getting more expensive. As an example, before the cost of delivering cargo by car from France or Holland was within the maximum of 3,5-4 thousand euros, now it is at least 8-9 thousand euros. For seeds, unlike potatoes, fertilizers and other heavy loads, this is not the most significant component of the price of the final product, but it must also be taken into account.
And this is just the tip of the iceberg. What problems we will face by the beginning of the new sales season, one can only guess.
- Can you highlight any changes in the preferences of buyers this season? I heard, for example, that the trading network X5 recommended that agricultural producers pay more attention to the cultivation of cone-shaped carrot varieties.
– The main trends of the Russian market in recent years: simplification and enlargement. Farms strive to achieve maximum mechanization of processes, reduce the number of personnel. Agricultural holdings use high-performance machinery, the same carrot harvesters (including self-propelled, two or three rows), however, these machines are often driven by poorly trained people. Cleaning is fast and hard. All this forces farmers to give preference to the cultivation of shantane-type carrots (just a conical shape), it is less subject to severe mechanical stress, but this is not the most ideal option in terms of taste, shelf life, and yield.
We could offer consumers hybrids that guarantee a higher yield (by 30-40%), but with such harvesting, the losses will be the same 30-40%. It's a given we live in, which is why shantane-type varieties are growing in popularity every year.
An alternative variant of shantane is the variety type kuroda, the losses during hard mechanized harvesting are only slightly higher, but the yield, shelf life and suitability for washing are much better.
The demand for certain varieties has been formed over the years. The first Russian-made carrots arrive on store shelves from the south of the country. In these regions, due to soil and climatic conditions, it is the type of shantane that is more suitable for cultivation, so the market gets used to it and “accelerates” along shantane. But these carrots do not store well. After the New Year, there is such a turning point when the market moves to Kuroda and Nantes varieties. Moreover, the latter in retail chains are classified as premium. As a rule, the best places on the vegetable shelf of the supermarket are reserved either for carrots grown and manually harvested in the North-West region (as a rule, this is the Novgorod region, peat bogs), or for Israeli washed. In both cases, we are talking about the Nantes variety type.
As for other crops, everything is standard there: people want the plants to get sick less, give a rich harvest, and the products are better stored.
- Now much is said about the need to develop domestic selection. Perhaps some of the European positions that you offer to customers today can be replaced by Russian ones?
- I would be very happy about the flourishing of domestic selection. Very talented breeders work in Russia, they achieve excellent results. There are crops in which Russia can already compete on an equal footing with Europe, but they are not key to ensuring food security. I can name excellent varieties of dill, cucumbers; progress is being made in regard to potatoes, and work is underway on cabbage. But almost the entire volume of other vegetables included in the borscht group is grown in our country from imported seeds.
From a professional point of view, it is very strange to separate varieties and hybrids of plants by country. There are only a few large breeding companies in the world, all of them operate on the territory of different continents and are almost nominally tied to some particular state. All have a long history (with rare exceptions, a century), that is, work on the creation of certain varieties and hybrids has been going on there for decades. A lot of money is being invested, the best minds are being attracted. There is a fierce competition between these breeding centers, as a result, consumers receive the best achievements of modern breeding.
In the assortment of our company, for example, there are hundreds of European varieties and hybrids of carrots, but only 10-15 items are in demand. As a rule, these are very expensive positions, why are agricultural producers willing to bear such costs?
Let's take a conditional carrot variety, which was created several years ago, and a modern highly effective hybrid of the same crop. Between them and before the currency jumps there was a very significant difference in price, five to ten times.
Seeds of varietal carrots per 1 ha cost between 10-12 thousand rubles, and hybrid seeds - from the same manufacturing company - already 80 thousand rubles. But the yield will also differ by at least 20 tons / ha, and 20 tons is already about 300 thousand rubles. Let's imagine that the prices for seeds increased by 25%, that is, instead of 80 thousand rubles. the agricultural producer will have to spend 100 rubles, but even in this case he will win. And we took into account only the cost of seeds and assumed that the crop would be sold directly from the field. But there are other factors: for example, if a farmer buys a disease-resistant hybrid, he saves on plant protection products. In addition, a good modern hybrid tends to have a much longer shelf life than a standard variety.
The main task of the agricultural producer is to make money, so he is looking for seeds that will allow him to do this.
– What, in your opinion, prevents the production of such hybrids in Russia?
“Only three things. First, at the moment we do not have a single (as far as I know) pure seed growing zone in our country (not actually, but at the level of legislation). But this issue is completely resolved.
With the second one, it is more difficult: in Russia, due to the peculiarities of the climate, there are not so many places where you can produce vegetable seeds. Of course, this work can be carried out even in the center of Moscow - in a greenhouse, as the Timiryazev Academy does, but the cost of such seeds will be very high, many times higher than that of Dutch or French ones. We need special areas where it would be possible to grow seeds in open ground. For some cultures (unfortunately, not for all!) There are such areas. For example, in the Soviet years, cabbage seeds were successfully obtained in Dagestan. You can try to revive production, but this will require specialists, a lot of money and time. At the same time, all over the world, cabbage seeds are grown by order of breeders in special zones on about. Tasmania, in Chile and Argentina, this way is much less time-consuming and costly.
And the third, main. The selection will take years.
Once I was given this explanation: “Imagine that I am a breeder and I have a clear work plan for every day without the right to make a mistake. But I have only wild forms of plants at my disposal. It would take 40 years to make a modern hybrid.” And it is true. Naturally, no one works like this now, breeders cross modern lines, but even if scientists have ready-made lines at their disposal, from which a good hybrid will definitely turn out, the result will appear no earlier than in 6-8 years.
And this is only selection, without another two additional years for registration and seed production.
I repeat, there are very strong breeders in Russia, they have their own achievements, but even if they start investing in this direction now, the consumer will not receive the hybrid he needs by the next season, and in a year, and even in five.
- What should we prepare for in the future?
- The country will continue to increase the area of cultivation of vegetables of the borscht group, although it will take another three years to reach the balance of the peak year of 2017. The market will not be able to recover in one or two seasons. And we will try to provide agricultural producers with high-quality seeds, and we are already making every effort to achieve this.
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