Russia’s corn and wheat crops in 2024/25 are on track to fall significantly from last year. While some of the decline is tied to weather challenges, many industry insiders think it is part of bigger trend of declining production resulting from three years of war with Ukraine.
Before Russia’s invasion of Ukraine in February 2022, Russian corn and wheat production was averaging around 92 million metric tons per year (5 year average 2017-2021). That included an average of 13.6 MMT of corn and 78.2 MMT of wheat.
Russian grain production proceeded to balloon to a combined average of nearly 108 MMT in the two marketing years following the outbreak of the war, with corn averaging around 16.2 MMT and wheat production averaging right at 92 MMT over 22/23- 23/24. For 2024/25, Russian corn production is set to decline almost -16% to 14 MMT while wheat output is on track to sink nearly -11% to 81.6 MMT, based on USDA’s most recent estimates. Inside the trade, I’ve been hearing the Russian wheat crop might end up being closer to 85 MMTs, but maybe not…
Russia’s production setbacks have been blamed on a string of unfavorable weather conditions, including severe drought, frost, and hail damage in some key production regions. But Russian ag industry insiders say there also are deeper issues at work.
Russian Grain Union (RGU) president Arkady Zlochevsky says Russian farmers’ bigger production hurdles stem from difficulties accessing high-quality seeds and Western farming equipment. The Russian government imposed import quotas on foreign seeds, but domestic alternatives yield 20–30% lower harvests, according to Zlochevsky.
According to a report from RGU earlier this year, the last reserves of imported seeds have already been depleted. While last season, this issue affected 30–40% of the harvest, it could impact up to 70% in the 2025 season, the RGU warned. The RGU further cautioned that the country’s total grain harvest could drop to 100 MMT next year.
Russian farmers have also cut back on fertilizers and other crop chemicals in an effort to further cut costs. Additionally, producers have been investing less in new equipment amid extreme uncertainties about the economy, along with sky-high borrowing rates. Russia’s central bank has held its benchmark interest rate at 21% since October of last year. The benchmark rate hasn’t been below 10% since August of 2023.
Oleg Sirota, a prominent Russian farmer and chairman of the Russian Association People’s Farmer, told Agfunder that even with subsidies, the current 20-25% interest rates on loans make it nearly impossible to finance new projects or expansions.
Russia’s ag sector also can’t escape a severe labor shortage. Russian farm associations say the country faces the worst shortage of farm workers since the end of World War II. The ag industry is reportedly struggling to compete with the military and defense sectors, which offer more competitive pay.
The Russian population has been in overall decline for more than three decades, but the trend has accelerated since the start of the Ukraine war. Russia recorded 1.222 million births in 2024, the lowest annual total since 1999. Compared to 2014, the birth rate has fallen by a third. According to demographer Alexei Raksha, the first quarter of 2025 likely saw the lowest number of births since the early 1800s.
Then there is the loss of Russian soldiers to the war in Ukraine. Losses are difficult to estimate since the number of casualties has not been disclosed by Russian authorities but Western intelligence agencies peg losses at around 800,00 to nearly 1 million. (Sources: World Grain, AgFunder, UkrAgroConsult, Reuters, USDA)
