🌾 Russia's Wheat Complex

Russia is scrambling to slow down rising food costs within its borders.

Fueled by the combo of pandemic-related uncertainty and a drought-stricken wheat crop, Russia is grasping for anything to bring stability to its domestic food and grain markets.

And last week, the country announced a preemptive wheat export tax increase...on a tax that’s not even in place yet.

A 25 euro per tonne tax that begins February 15th will now double to 50 on March 1st.

Why it matters: Last year Russia shipped 34.4 million tonnes of wheat and was projected to top 40 million tonnes this year, cementing its place as the top wheat exporter globally.

It's pretty much like the big kid on the playground taking his toys and going home.

Egypt is one of the kids still sitting on the playground, left high and dry. As Russia’s top wheat customer, they are left searching elsewhere for the small grain. Bangladesh is in a similar position, now relying on Ukraine for its gluten fix.

On the home front: U.S. wheat prices have spiked over the winter months. The grain has been trading around $6.75, almost a full dollar higher than in early November.

Where this goes: The Russian export developments are only adding to the fear of tight global grain piles. With tighter supplies, grain buyers are left paying a premium while producers sit in a sweet spot when they have market access.

→ Terminated Tyson manager speaks out. One of the seven leaders fired from the Waterloo plant cried foul on negative media reports. He noted the spontaneous bet was centered on the plant's ability to stay below the community's positive COVID-19 rate.

→ Draganfly Drones gets USDA’s pick. The department will use the Canadian drone manufacturer’s Commander fleet to help in phenotyping and other data collection projects.

→ Food prices on the up. The FAO Food Price Index notched a seventh straight month of increased prices, marking a three-year high.

→ Smooth sailing planting: Schaffert Manufacturing and Graham Electric Planter will beta test their new bump-resistant row units for rocky geographies to increase seed placement precision.

→ Wendy’s progressive partnership. The fast-food giant revealed 40% of its U.S. fresh, never frozen beef was supplied through Progressive Beef-certified feedlots. The certification validates animal welfare and sustainability standards.

→ Blazin’. A 20,000-acre grass fire was contained late last week along the South Dakota/North Dakota border. High wind gusts up to 56 mph fueled the flames across 19 farms.

What’s a billionaire technology titan to do when he’s looking to diversify his mega net worth?

Head to the farm.

The Land Report revealed that Bill and Melinda Gates are the largest private farmland owners in the United States. The couple owns 242,000 acres across 19 states with the largest stakes in Louisiana, Arkansas, and Arizona.

The backstory: The land portfolio has been pieced together over the past several decades by Gates' personal wealth manager and director of holdings for the Bill & Melinda Gates Foundation. The goal was to diversify Gates’ investments away from tech holdings, a majority of his portfolio.

But when it comes to agriculture, it's not Gates’ first rodeo.

Gates and his foundation have made headlines for investing +$100 million in international agriculture development programs. He’s also become a notable early-stage investor in a wide array of agrifood startups like AgBiome, Apeel Sciences, Stellapps, Pivot Bio, and more.

+ Also on the ‘Land Owners Leaderboard’? The ‘Wonderful Company’ owners, Stewart and Lynda Resnick. Known for their pomegranate and pistachio brand, the couple has racked up 190,000 acres.

MAGNETIC'S MUST-SEE STUFF

Get smarter. Ag Solutions Network presents AgEmerge 2021, a deep dive conference into the industry’s hottest topic: regenerative ag. From concept to practice, learn how to move your farm (or a customer’s) forward. Register today and enjoy from the comfort of your couch.

What If? farmdoc to the rescue with their updated 2018 Farm Bill What-If Tool. Head here to test cropping scenarios based on ARC and PLC choices under various price and yield scenarios.

Magnetic’s favorite newsletters:

→ Looking for a deep dive into ag retail or agronomic trends & tech? Upstream Insights with Shane Thomas is our fave.

→ Is the future of animal protein/meat processing more your jam? Janette Barnard brings all the knowledge in Prime Future.

Last week, the USDA peeled back its report on the latest forecast for the 2020-2021 Florida citrus crop. And well...it’s worse than they thought.

The January outlook dropped by 2 million boxes from last month’s forecast, resulting in a projected 20% decrease from the 2019-2020 growing season.

By the numbers:

90 pounds, the industry standard for a “box” of oranges
67.3 million boxes, the final yield from the ‘19-’20 season
54 million boxes, the projected crop for this growing season

How we got here: Since it was first detected in 2005, citrus greening disease has caused a +75% decline in Florida's production of oranges. The disease results in bitter fruit, and eventually...a dead tree. Plant breeders are working around the world and around the clock to develop resistant varieties of orange trees.

Citrus processors are also feeling the squeeze. Most of the Florida orange crop goes to filling your orange juice jugs. And although the pandemic has resulted in a slight uptick in OJ consumption, a long term downtrend paired with greening disease uncertainty has stressed the capital-intensive industry.

Glass half full: Even with the projected yield decline, the Florida Department of Citrus is staying positive: “Grapefruit production is up, growers continue to make great strides against citrus greening, and consumers are more focused on health and wellness than ever before.”