The low cost of grain is rapidly slowing down the pace of development of the agricultural industry. Market participants do not expect a significant increase in prices.

In some regions, at the current stage, grain prices do not allow farmers to recoup the costs of its production. However, sales of grain products and oilseeds continue. Some farmers do not see the point in delaying the harvest until better times, since they do not expect prices to rise. Others sell part of the harvest to provide working capital.

At the end of October, the general director of the Tambov Farms company, Igor Polyakov, said that the selling price of class 4 wheat without VAT was 10 thousand rubles per ton, which coincided with the costs of its production. Thus, the profitability of working with wheat turned out to be negative, according to him.

Commercial Director of the Irrico Group of Companies Victoria Askhabalieva confirmed that prices for grain and oilseed products are really low. At such price levels, the profitability of agricultural holding enterprises will be minimal. Already in the fall, the harvest from the southern divisions of Irrico was sold at a favorable price, while the company has not yet sold the harvest from the central sites. Askhabalieva believes that price increases are possible with the active development of exports.

General Director of Krasnodarzernoproduct-Expo Evgeny Sidyukov said that the company has already sold about 30% of the harvest, and the rest has been put into storage. He noted that at the moment there is no point in selling grain due to low prices. In the Krasnodar Territory, grain and oilseed production remains profitable, but business profitability has decreased significantly. Sidyukov emphasized that this does not allow for active updating of combines and tractors.

Anna German, co-owner and director of the Dary Malinovki agricultural holding, noted that prices for grain products in Russia are currently very low. According to her, profitability for wheat and other grains is minimal, and in most cases, farmers manage to achieve profitability only through exports. This year, costs for logistics and spare parts for agricultural machinery have significantly increased production costs.

The situation with oilseeds is slightly better than with grains. For example, the company "Dary Malinovki" receives good profitability from rapeseed, in which Chinese partners are interested. However, the overall price situation continues to be tense. Herman noted that they do not expect prices to rise and therefore are actively selling rapeseed to China.

The Dary Malinovka agricultural holding supplies wheat almost throughout Russia. Due to very low prices, they aim to achieve profitability through exporting to China. There is a stable surplus of grain crops in the company’s region, and the state periodically carries out interventions to solve the problem with the sale of grain. Anna German believes that the optimal price for wheat should be at least 16 thousand rubles per ton including VAT.

As for prices for next year, the head of the Lazarevskoye breeding farm, Kristina Romanovskaya, believes that they depend on the harvest. She also noted that restrictions on the export of Russian grain, such as duties and quotas, have led to an increase in wheat stocks. As a result, the price level has dropped significantly compared to last year.

The profitability of wheat production at Lazarevskoye grew at an accelerated pace until 2021, but eventually decreased. In 2022, the decline in grain profitability was significant; grain prices at the beginning of the season in some cases fell below cost. Romanovskaya emphasized that this happened due to reasons such as export restrictions and increasing production in other countries.