Currently, Russian grain producers are waiting for prices to rise, as they see no point in selling at current prices.
Most farmers have either finished harvesting or are close to finishing it. Despite this, they are in no hurry to sell off their grain.
The main reason for this is the low prices that have currently set in the market. Representatives of agricultural companies assure that if they sell their harvest at today’s prices, it will not allow them to make a profit, or even recoup their costs.
At the same time, costs have also shown significant growth over the past year.
According to experts, they have grown by at least 15-20% compared to last season.
Accordingly, it is simply impossible for most agricultural enterprises to sell their harvest at last season’s prices, as their management openly states.
In addition, many companies have seen their yields decline, which is also due to unfavorable weather conditions: May frosts coincided with little precipitation during the spring and summer.
At the same time, world prices are low today, and Russian prices, which are following them, are also not showing any momentum to move up.
This is what leads to farmers being forced to wait for quotes to rise, although there is no certainty about when it should happen and how strong it will be.
Currently, farmers are making efforts to increase future margins.
In particular, cost optimization through digitalization, automation, and procurement planning is used for this purpose.
However, experts admit that this alone will not be enough to stabilize the situation if they refuse to raise prices.
At the same time, a critical issue for most Russian farmers today is the availability or absence of storage space for the harvest.
Those companies that have the necessary space are able to hold onto the harvest for a long time, waiting for the pricing situation to become more favorable.
If the enterprise does not have free storage space, this may stimulate it to sell it as soon as possible at prices below cost.
However, such a decision causes losses instead of profits, which casts doubt on the company’s future ability to operate, not to mention modernizing production.
At the same time, farmers emphasize that they are not going to keep the harvest for a long time in order to wait for very high prices. As soon as there is an opportunity to sell at least at a loss, they are ready to do so immediately.
