Bloomberg News

Black Earth Farming Reports 15% Bigger Net Loss on Bad Crop

February 24, 2012

Feb. 24 (Bloomberg) -- Black Earth Farming Ltd., a Stockholm-listed Russian grain producer, said its net loss increased about 15 percent to $41.7 million last year from $36.4 million a year earlier because of bad crop quality.

The company sold 399,473 metric tons of grain last year, up from 208,667 tons a year earlier, while earning less because the low-quality crop was sold cheaper, at an average price of $157 a ton, down from $162 a ton, it said in a preliminary annual report published today.

The crop’s yield was damaged by a dry spell in the summer and its quality was further affected by excessive wet weather in the autumn of 2011, the company said.

Black Earth Farming’s winter wheat, which is planted over 82,000 hectares (202,000 acres), is in good condition so far because it was protected with “decent snow cover” from frosts in January and February, it said. The grain producer plans to sow an area of about 230,000 hectares for the 2012 crop, according to company data.

To mitigate risk, Black Earth Farming has sold about 60,000 tons of 2012 crop forward, mostly malting barley, as well as some sunflower and rape seeds.

The company, based in St. Helier, Jersey, farms fields in the so-called Black Earth regions of Kursk, Tambov, Lipetsk and Voronezh in southwestern Russia. The company’s land bank includes 260,000 hectares in full ownership with other 28,000 hectares in process of ownership registration and 40,000 hectares in a long-term lease, according to company data.

--Editors: Alex Devine, Tony Barrett

To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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