Agricultural Production to Increase by the End of This Year

 The chief editor of Agroinvestor Nikolay Lychev says that the low-base effect of 2018 will have a positive impact on the industry.

 Agriculture is going to witness a growth of 1-1.6% in the end of the year compared to a decline of 0.6% in 2018. In January - September, the sector increased by 3.6%, Rosstat reported. The agribusiness, accounting, though, just over 3% in the national GDP, is now making a significant contribution to its growth.

 GDP’s growth of 3rd quarter amounts to 1.9% year-on-year. The ministry estimated the contribution of agriculture to its increase at 0.2% or a tenth of the total expected growth of the country's economy. The agricultural sector is increasing about three times faster than GDP. This is not an evidence of how good our agricultural industry is, but once again it confirms the absence of large growth drivers in the economy, even at good energy prices. But the fact remains: in the last 5-6 years, agriculture has been among several spheres of the real sector, showing positive dynamics against the background of general stagnation and decline in business activity.

 This year, both crop production and animal husbandry are growing. For example, livestock and poultry production for slaughter more than doubled in September, to 4.7% y-o-y. The main drive factor was an increase of 13% in pig production in agricultural organizations, including large industrial producers.  Poultry farming increased by 0.2% to 4.6 million tons during the first nine months of 2019. Milk production went up by 1.7% in January-September, beef – by 2.3%. Of total livestock, only egg production decreased by 0.5%, but this sector is already over-saturated.

 In crop production, the low base effect of the previous year, with grain yield reduction by 16%, is obvious. Meanwhile, all grain harvest is progressing: firstly, the 2018 crop is still one of the record crops in the history of Russia, and secondly, this year's grain harvest will steadily increase to 120 million tons. Slightly negative results of previous months, including the impact of dry weather on the crop, have mostly not been repeated. Droughts remain local,  we have warm end of summer and beginning of autumn, favoring to stabilization of the positive wheat production, forecast to range from 75 to 77 million tons and reach the second record high after 86 million tons of 2017 wheat record.

 The favorable weather of September-October had a positive impact on corn output growth, which was higher than expected. In the second half of October, 50% corn hectares were harvested. The average yield was 29% better than last year, and in the Central Russia and the Volga Federal District corn yielded at a record high. Rusagrotrans analysts forecast corn production at 13 million tons with 12% yield increase. The barley crop is also forecast to grow by around 20% and reach 20.5-21.5 million tons, according to the results of all harvest. In October, experts did not record a typical decrease in wheat output as the harvest progress moved to the North and East. Additionally, in the second half of October, the Ministry of Agriculture, summarizing the intermediate results of harvesting, reported growing productivity of all the main agricultural crops: wheat, barley, corn, sugar beets and sunflowers. A record gross yield is expected for key oilseeds – sunflower, soybean and rapeseed.