Grain growing in Russia is rapidly losing popularity

Russian farmers are significantly reducing the sown areas of wheat and rye, the country’s most widespread grain crops, due to low profitability and challenging market conditions. Instead, they are shifting focus to more lucrative oilseed crops like sunflower and rapeseed, as well as legumes, to maintain business viability. This trend, together with the deterioration of crop quality and adverse weather conditions, could lead to a decrease in grain harvests in 2025, which would affect Russia’s position in agricultural markets, reports the Russian publication Kommersant.

The sown area for wheat is projected to decrease in 2025. According to Andrey Sizov, Director of the SovEcon analytical center, wheat sowing may drop to 28.2 mln ha, a reduction of 0.3 mln ha compared to last year. Dmitry Krasnov from Rexoft Consulting estimates the figure at 27.4 mln ha, a 4% decline. Dmitry Rylko, General Director of the Institute for Agricultural Market Studies, notes that winter wheat areas decreased by 0.5 mln ha over the past year. Daria Snitko from Gazprombank suggests further reductions in spring wheat sowing, which is still ongoing.

The trend of reducing wheat sowing began last year when its share in Russia’s sown area structure fell from 36.5% to 35.4%, freeing up 1.2 mln ha, according to Rosstat data. The primary reason is declining profitability, explains Rylko. In southern Russia, wheat profitability is only 5–10%, while in the Volga region, it is negative due to export duties, quotas, low global prices, and a stronger ruble, adds Sizov.

Domestic demand for grains is also stagnant. Krasnov points out that cattle herds are shrinking, investment in the meat and dairy sector remains low, and feed rations are shifting away from grains, reducing demand. Andrey Neduzhko, General Director of the Steppe agribusiness, reports that the average profitability of crop farming, for instance in Rostov Oblast, was only 14% last year due to rising costs for fuel, fertilizers, seeds, crop protection products, and loan servicing.

Some companies, such as the Lazarevskoye agribusiness, are abandoning commodity grains altogether due to unstable financial results. Kristina Romanovskaya, head of the company, notes that selling wheat with high added value, such as in the form of feed or seed material, is more effective. Progress Agro Group adds that processing, such as flour production, can boost wheat profitability from zero to 12%.

Wheat is not the only crop losing ground. Rylko highlights reductions in barley and buckwheat sowing, while Krasnov mentions corn. Rye is nearly disappearing from fields: in 2010, it occupied 1.8 mln ha (2.3% of sown areas), but by 2024, this fell to 0.6 mln ha (0.8%), a 21.5% drop year-on-year. Romanovskaya explains that rye is used only domestically for flour and alcohol, with its fodder use lost. Rye exports are hindered by the closure of Scandinavian markets after 2022.

Farmers are pivoting to oilseed crops, which promise higher profitability. Krasnov forecasts a 5.5% increase in oilseed sown areas, reaching 20 mln ha. Sunflower areas may rise from 9.8 mln ha to 10–11 mln ha, soybeans from 4.3 mln ha to 4.5–4.6 mln ha, and rapeseed to a record 3 mln ha from 2.7 mln ha. The Rosselkhozbank’s Center for Industry Expertise predicts oilseeds will cover 20.3 mln ha, or 24% of total sown areas. Oilseed flax is also gaining traction, with sowing potentially increasing by 258 thsd ha.

Sunflower remains profitable despite high export duties, as oil prices are below global levels, allowing seeds to appreciate in value. According to SovEcon, the average sunflower price rose 43.4% over the year to 39.2 thsd rubles per ton. Romanovskaya emphasizes that demand for rapeseed and sunflower is growing due to biofuel and feed development. Additionally, farmers are expanding legume crops like lentils, chickpeas (up 40% at Steppe), and peas (up 10%), as well as niche crops like mustard, millet, and sorghum, which are drought-resistant.

However, changing crop rotation has limitations. Krasnov notes that transitioning to new crops requires significant investments in seeds, equipment, and storage, which not all can afford. For instance, monoculture sunflower farming depletes soils, so it is sown once every 6–7 years, explains Romanovskaya. Neduzhko adds that regional restrictions on sunflower are introduced to prevent soil degradation.

Harvest forecasts are bleak. SovEcon predicts the 2025 wheat harvest at 81 mln tons, down from 82.6 mln tons last year (and 92.8 mln tons in 2023). Reduced spending on fertilizers and crop protection makes plants vulnerable to frosts and climatic anomalies, such as water shortages in the south or overwatering in Siberia. Albina Koryagina notes that 13% of winter crops were rated weak as of late March, increasing risks of lower yields.

Tags: wheat, sown area, crop forecast, Russia, corn, barley