Page 47 - bne IntelliNews Russia OUTLOOK 2025

5.2 Agriculture
After several years of all-time record high harvests, Russia’s farmers took in 14% less grain y/y in 2024 of 125mn tonnes, including 82.4mn tonnes of wheat, according to preliminary data from Rosstat released on Christmas Day. The outlook for 2025 is for another decline.
The result is down from 2023, when yields reached 144.9mn tonnes, including 98.2mn tonnes of wheat. The all-time high record harvest of 153mn-155mn tonnes of grain was set in 2022.
The most recent result was pulled down by poor weather and mounting economic challenges. In 2025 wheat production is projected to drop further to 78.7mn tonnes, its lowest level since 2021.
Harvest levels for most crops fell in 2024, with the exceptions of rice and soybeans. Beetroot production dropped from 53.1mn tonnes to 41.9mn tonnes, while potato yields declined from 20.2mn tonnes to 18mn tonnes, The Bell reports. Grain consulting firm SovEcon has warned that the downward trend is likely to persist, with its head, Andrei Sizov, attributing the problem to a combination of environmental and economic factors.
Export tariffs and restrictions introduced since 2021 to stabilise domestic prices have eroded farmers' profitability. Additionally, adverse weather conditions, including drought and unexpected frost in May, compounded the problems.
Like everyone else in Russia, farmers are grappling with soaring inflation, escalating costs for equipment, seeds and agricultural chemicals, made worse by import restrictions, a weak ruble, and higher recycling fees. “Labour costs are also increasing,” Sizov noted due to Russia’s chronic labour shortage, forcing farmers to economise on critical inputs, further affecting yields.
Wheat prices in Russia rose by nearly a third in 2024, spurred by a weakened ruble and higher global prices. While some farmers boosted exports in the first half of the year to avoid new tariffs, domestic price controls limited their ability to capitalise fully on the global market.
The decline in harvests has implications for Russia’s broader economy. Although domestic bread and flour prices are less sensitive to wheat prices due to other cost factors, fruit and vegetable prices remain closely tied to harvest outcomes.
47 Russia OUTLOOK 2025 www.intellinews.com