Saskatchewan farmer Jim Hallick was relieved when he heard that Russia and Ukraine will one day become major grain exporters.
That was because he feared those countries had already arrived.
“We thought they might be exploding out into the world market already,” said Hallick, who farms near Sturgis.
“But from what they said, they have a number of problems to overcome before they get on track with production and transportation and machinery and good seed.”
Hallick was one of hundreds of farmers and grain industry people who attended a session on Ukraine and Russia during the Canadian Wheat Board’s Grain World conference in Winnipeg.
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Russian grain industry analyst Andrei Sizov told the conference that Russia will probably not become a yearly source of net grain exports. He said this year’s large Russian wheat exports were caused by low domestic prices and high world prices rather than a newfound desire to export grain.
Sizov said Russian grain will probably stay within the country to feed the livestock industry, which is recovering after it shrunk during the 1990s because of economic crisis.
Only in years of bumper crops will Russia be a net grain exporter, Sizov said.
“Russia is going to be self sufficient.”
Ukrainian farm leader Leonid Kozachenko said he thinks Ukraine has unbounded agricultural potential, but will take time to reach it. Ukraine has access to good ports, easy access to European Union markets, some of the best soil in the world and a strong desire to capture hard currency by exporting grain.
But he said the country needs about $20 billion invested in farm machinery and infrastructure. Right now farming methods are far less advanced than in the West. Most farmers have little access to fertilizer and pesticides.
If Ukrainian farmers had access to these tools, as he believes they will, they would become big producers of export wheat. But investment is needed before Ukraine will be able to reliably export millions of tonnes every year.
Brian White, head of the CWB’s market analysis department, said he sees no immediate threat to Canadian markets from Russia and Ukraine and thinks Canadian farmers will have time to adapt to these new players. They both have great potential, but realizing it will be difficult.
“It’s inconclusive,” White said.
“Ukraine and Russia have problems. They need a lot of farm machinery. They need a big investment. That big investment is going to require financing, and I don’t know where they’ll find that financing. It’s going to be a slow row to hoe for them. They’re going to be there in the future, but not in the volumes we’ve seen this year.”
Hallick said many farmers were alarmed by the sudden appearance of millions of tonnes of wheat and other grains from Russia and Ukraine this year, but he now feels 2002-03 was an exceptional year.
“I see them as a burgeoning player in the grain trade rather than somebody that’s going to take over the world immediately.”
