The traditional review of the situation in the potato industry will begin with a brief summary of the season. In general, it was quite complicated, especially for small producers: table potato prices did not increase until the beginning of May.
Alexey Krasilnikov, Executive Director of the Potato Union of Russia
Wholesale prices for table potatoes have remained at a stable low level for a long time since the end of winter. So, at the beginning of April the cost of a kilogram of potatoes on average in Russia did not exceed 9,1 rubles / kg (excluding VAT). In some regions that harvested a rich harvest in the fall (in Bryansk, Voronezh regions, Tatarstan), potato growers were forced to sell their crops at 7-8 rubles / kg, and lots of low quality at 5 rubles / kg. Prices by mid-spring 2019 were lower than last year by about 40%.
But from the first days of May, in most regions, we recorded a noticeable increase: in the Moscow region (as well as in the Belgorod, Penza, Vladimir, Volgograd, etc.) the average price in the first ten days of May was in the range of 13-14 rubles / kg, in some cases - 15 rubles / kg. In fact, the industry has reached the level of last year.
So far, the situation in the Urals and in Siberia, in the Novosibirsk and Tyumen Regions remains a bit worse, an average of 12 rubles / kg is sold, but in these regions large stocks of old potatoes are kept, which put pressure on the market.
A long period of "lack of price" for potatoes naturally led to a reduction in sales. According to the Federal State Statistics Service, as of April 1, 2019, 757 thousand tons of products remained in the storages of large farms (for comparison, 685 thousand tons remained in warehouses on the same date last year).
It should be noted that a year earlier, many large potato surpluses in the warehouses of Russian producers were associated with massive purchases of early potatoes from abroad organized by large trading networks. Recall, then about half a million tons of products were imported into Russia, of which more than 360 thousand tons fell on the Egyptian. From mid-winter to the end of the season, retailers refused to buy potatoes from Russian producers, which hit many farms hard. This year, as previously expected, this scenario was avoided. The lion's share of Egyptian potatoes went to European countries, which lost a significant part of their own harvest due to drought. From February to April, only 59 thousand tons of product was imported into Russia, which is several times less than a year earlier! An increase in supplies today is hardly worth fearing: the entry price for Egyptian potatoes currently exceeds 40 rubles / kg, which makes this product uncompetitive on the shelf.
Let us also pay attention to the fact that this year the arrival of early potatoes from Russian stores to Azerbaijan was significantly delayed: large export duties were in effect in this country until April 30, so the authorities tried to stabilize prices on the domestic market.
In the near future, domestic producers should already occupy the niche of early potatoes: traditionally, Astrakhan potatoes begin to be sold in mid-June, but given the weather, it is possible that deliveries will begin even earlier than usual.
By the way, according to media reports, this year the first lots of potatoes have already been put up for sale by agricultural producers in the southern regions of Poland. Even taking into account the abnormally warm spring, the potato harvest in mid-May is a unique result for territories with climatic conditions similar to our Bryansk region, for example. But the prices for such a product are no less striking - about 2,3 euros / kg.
Summing up the season, I cannot fail to note a fact that is very important for the development of the industry: according to the Ministry of Agriculture of the Russian Federation, in 2018, 1,5 million tons of new storage tanks were commissioned. This is a record, for comparison, let us recall that in 2016 23 new storage facilities with a total capacity of 258,3 thousand tons were launched, in 2017 - during the suspension of the state program on compensation CAPEX - it is still two times less.
In general, of course, we must admit that the Ministry’s policy aimed at increasing the volume of quality storage in the country gave impressive results.
But back to the main theme of the new season.
According to the forecast of the Ministry of Agriculture of the Russian Federation this year, 303 thousand ha will be allocated for potatoes in the country's industrial sector. Thus, according to preliminary estimates, the planting area will increase (compared to last year) by 15 thousand hectares. This figure raises some doubts, although some regions of Russia have indeed announced the allocation of additional land for this culture.
First of all, we are talking about the Republic of Crimea (in the fall Crimeans harvested 900 hectares, this year they planted on 2500 hectares). Given the high demand and decent prices of the product on the peninsula, this is a well-thought-out solution.
According to forecasts, the area of potato cultivation in North Ossetia will increase by 1900 hectares; potato fields in the Tula region will expand by 1000 hectares, the Astrakhan region will add the same amount. Potato areas will be planted on 800 hectares in the Stavropol Territory, and on 700 hectares in the Krasnodar Territory.
But there are regions where the area under potatoes will be reduced, including: Perm Territory (-1300 ha), Ryazan Region (-1000 ha), Lipetsk Region (-380 ha), Tambov Region (-290 ha).
However, the final calculation should be postponed until the completion of planting work. Now they are moving at an active pace, weather conditions in the main resource regions are characterized as optimal: there is enough heat and moisture. In a number of regions (for example, in the Middle Volga region), abnormally high temperatures are noted, but this should not adversely affect the development of plants.
As of May 16, according to the Ministry of Agriculture of the Russian Federation, potatoes in agricultural enterprises and peasant (farm) farms were planted on an area of 154 thousand hectares, or 47,9% of the forecast area (in 2018 - 134,6 thousand hectares).
What are we planting?
It can be noted that Russian farms still prefer to work with the achievements of foreign breeding. According to the Russian Agricultural Center, the top twenty varieties this season include only two domestic varieties (Nevsky and Udacha), accounting for 11% of certified planting material. Another 3-4% of this number is added by Russian varieties, also used in the work, but not included in the main list. That is, in general, the share of Russian varieties in the total volume of seed does not exceed 15%.
Moreover, the main part of the seed material of foreign selection is of Russian origin. The import of seeds from abroad is declining. In particular, this year our country purchased no more than 10 thousand tons of seed potatoes, perhaps after summing up this figure will be even lower, as a number of Russian applications could not be provided by European producers due to the shortage of products caused by last year's drought.
PROBLEMS OF THE SEASON
The new agricultural season habitually began with an increase in the prices of “consumables”. In particular, the expected price increase (by 15-25%) of seed potatoes from a number of foreign producers (we wrote about the reasons in the previous issues of the magazine more than once). Some domestic seed companies also raised the prices of their products, they justified the increase by various factors, including the increase in the cost of fuel and lubricants.
Against this background, part of agricultural enterprises (mainly those who were not able to realize significant volumes of last year's harvest) used ware potatoes for planting.
Speaking of seeds, one cannot fail to mention the difficulties that agricultural producers of certain regions faced in the new season when trying to get subsidies for providing unrelated support. The fact is that this year only enterprises that use agricultural seeds for planting, varieties or hybrids of which are included in the State Register of Selection Achievements for a specific region, can count on assistance from the state.
I will make a reservation right away, there is a certain logic to this innovation: from the point of view of the authorities, it is not worth spending taxpayer money to cultivate varieties that have not shown themselves in a particular region. On the other hand, it must be recognized that during state tests, advanced technologies are often not applied (mineral fertilizers are not applied, plant protection products are not used, irrigation equipment is not provided). Although some modern varieties show good results only with the exact observance of certain technologies.
Specialists of the Potato Union have repeatedly discussed this aspect of the problem with representatives of the Ministry of Agriculture of the Russian Federation. At the moment, an agreement has been reached that farmers who see the high potential of a certain variety can, if they wish, arrange for repeated trials for it. For this, it is necessary that the branch ministry of agriculture submit an appropriate application (supported by the recommendations of agricultural producers) to the State Commission. But the customer will have to pay all the costs of testing using modern technologies.
In the near future, this decision will be introduced into the regulatory field.