From July 1, a new agricultural season began. The 2024/25 season proved to be challenging for farmers, and it is anticipated that the industry's profitability will remain at the same level in the new agricultural year. However, in some regions, the yield of certain crops is currently higher than last year. According to forecasts, this season oilseed and leguminous crops may set new records in production.
Last season was challenging for the agricultural business, noted Dmitry Rylko, the director general of the IKAR Institute for Agricultural Market Conditions. The yield of oilseed and leguminous crops was acceptable, but wheat showed low profitability results. Due to this and unfavorable weather conditions, there was a reduction in winter wheat sowing for the next season. Rye had a low sowing level last autumn, and spring wheat and barley significantly reduced their areas by spring. Experts note that the areas under these crops reached a level not seen since 1970.
At the same time, last year's sowing of the three main oilseed crops - sunflower, soybean, and rapeseed - was record-breaking. According to IKAR experts, record areas were also planted with chickpeas, lentils, and possibly peas. According to specialists, the current year may also bring record yields of oilseed and leguminous crops.
The main conclusion of the 2024/25 season is that it turned out to be uneconomical for grain producers, leaving them with "neglected pockets," stated Arkadiy Zlochevsky, the president of the Russian Grain Union. The unfavorable economy of the past agricultural year deprived grain producers of reserves for the upcoming season and increased bankruptcy risks. Although bankruptcies have already occurred, they are not on a massive scale: the reserves from the previous year helped farmers continue their work despite losses.
Another trend of the past season was the weak grain export shipments compared to export capabilities. The end of the 2024/25 agricultural year confirmed the expectations of the head of the Russian Grain Union: exports slowed down, and domestic prices became stronger as farmers saved on grain storage, impacting export deliveries. This helped support prices within the country, despite exporters pressuring producers.
Zlochevsky also notes that the number of exporters in the 2024/25 season decreased compared to the previous period. The consolidation among exporters leads to a situation where the market is either pressured by buyers, especially in grain surplus conditions, or keeps prices stable in the case of resource scarcity, making exports unprofitable.
Regarding the new agricultural season, the Russian Grain Union does not believe in optimistic forecasts regarding a harvested grain yield of 130 million tons without considering data from new regions. The union head reminds that in spring, the yield forecasts were focused on 125 million tons without new territories or 129 million tons with them. The presumed high indicators of other analysts from his perspective are unfounded, as they are based on a five-year average yield, including two record highs of 145 and 157 million tons.
A record in oilseed crop production is expected for the next season, especially for sunflower. Warning about a large production volume, Zlochevsky points out the potential decrease in prices for the new oilseed crop, primarily sunflower. The profitability of oilseeds, in his opinion, will significantly decrease, prompting farmers to change their crops, which in turn will lead to an increase in harvested crops.
Grain crop profitability is unlikely to recover in the near future, according to Zlochevsky. Existing export quotas and duties continue to suppress competition among buyers, forcing exporters to take into account additional risks, as they cannot predict the level of tariffs in the future. The fluctuation in tariff rates has reached up to 2,000 rubles per ton over a two-month period, leading exporters to prefer purchasing grains from farmers at a price 2,000 rubles per ton cheaper than the profitable export level.
According to the director, the allocation of export quotas affects the formation of purchase prices for producers. If the grain price management mechanism is not changed, investments in grain production will remain inefficient, emphasizes Zlochevsky. Investments in wheat have already dropped to zero, and grain production profitability is negative, which will lead to a reduction in sown areas and a decrease in the total grain harvest. In his opinion, the decrease in oilseed crop profitability in the 2025/26 season will also have a negative impact on agricultural economy in general.
For the company "Flagman" from Krasnodar Krai, the 2024/25 season was successful in terms of grain crops. They achieved good results in wheat yield and are pleased with their accomplishments. However, due to drought in Kuban last summer, some grain crops faced water shortages, which affected the final harvest. For example, the sugar beet yield was in a wide range. In the new season, sugar beet acceptance prices are forecasted to be lower.
Overall, the 2025/26 season promises to be more challenging compared to the previous one. The rise in fertilizer prices is becoming more noticeable, especially during seasonal fluctuations and when prices for all necessary products in this segment increase. Zarudko states that commercial interest rates are too high and hinder agricultural enterprises' development. If the economic situation in agricultural finance is not improved, and accessible subsidized loans do not become available, very difficult times are ahead for Krasnodar agricultural producers in the next two years.
Zarudko also notes the negative impact of weather factors affecting this year's harvest. Due to a lack of moisture, winter wheat and barley did not sprout for a long time; all sprouts appeared only in November. Hot weather in March and frosts in April also affected plant development. However, with rains in April, the yield in some areas turned out to be acceptable, but it still depends on the weather in July and August.
The 2024/25 season was challenging, admits Dmitry Inyutin, the deputy director general of the agricultural enterprise "Rodnoye" in the Tula region. He notes a decrease in profitability for main crops and an increase in expenses. He does not mention the development of events in the 2025/26 season, emphasizing the situation's dependence on multiple factors. In case of lifting export duties on grain, profitability will increase, as the duties significantly reduce it. Currently, he expects the yield level to be on par with the previous year.
