Four Key Risks Pressing Russian Agriculture in the Current Cycle

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This year, farm producers in Russia face four primary risks that touch every corner of the agricultural supply chain: access to machinery and equipment, grain logistics and storage, seed stock shortages, and the availability of qualified staff. The assessment comes from Yakov & Partners, a firm formed by veterans from major global consulting groups, and was shared with editors who cover agriculture in Russia. The findings stem from a survey of managers and experts across Russian agro-industrial companies and are summarized in a forthcoming report.

Farmers identify the most pressing issue as the difficulty of buying and maintaining self-propelled farming equipment. Specifically, a sizable portion of respondents point to insufficient tractor supply, while a quarter report trouble obtaining combines and about one in ten note problems with trailer equipment vital for field operations. In practice, the whole range of field machinery calls for rapid localization efforts, from complete units down to smaller components, according to Alexei Poroshkin, a senior Yakov & Partners analyst and co-author of the study.

The second major risk relates to the record harvests of recent years, which encounter bottlenecks in logistics that leave grain storage capacity overwhelmed. Farmers report record outputs in various regions, with more than half of producers in some zones exceeding plans. Because of high harvest volumes and existing logistical constraints, tens of millions of tons of grain remain stored. Many respondents are uncertain about how to handle these balances moving forward into the next season. Poroshkin notes that the 2022–2023 season could see stocks of finished grains in Russia reach substantial totals, including a forecast of roughly 26 million tons of stored grain and about 17 million tons of wheat.

As prices and storage costs press on margins, the report warns that the current price environment may squeeze farmer profitability. If margins shrink significantly compared with the previous year and with the 2020–2021 period, an ongoing decline in grain production could follow. Estimates indicate production might fall by a notable percentage in the 2023–2024 period, underscoring the risk of diminished output across key crops.

A further risk highlighted by Yakov & Partners is the shortage of high-quality seed stock. About one-fifth of respondents report gaps in seed quality, which complicates the pursuit of higher yields. In the report, farm leaders note that high-yield Russian varieties for wheat and barley have not yet emerged, and while acceptable substitutes exist for most crops, suitability varies by crop and region.

The fourth risk identified is the persistence of a shortage of qualified personnel within the agricultural sector. This challenge touches every level of farming operations and affects the ability to implement advanced practices, maintain equipment, and manage storage and logistics efficiently.

The survey conducted by Yakov & Partners took place at the end of December 2022 and included farmers from 96 Russian companies with land banks ranging from twenty thousand to one hundred twenty thousand hectares. The geographic scope covers 3.3 million hectares across twenty districts in Russia’s four federal districts. The results reflect the perspectives and experiences of a wide cross-section of the national farming community, highlighting the operational and strategic pressures facing the sector as it navigates a period of high harvests, supply constraints, and evolving market dynamics.

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