Despite US sanctions, Russia is now top wheat exporter, proving sanctions won’t work – MarketWatch:

Wheat, the world-feeding crop whose shortage was Pharaoh’s nightmare, is now at such a global surplus that last month its price was less than two-thirds its level in 2008.

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Wheat prices have plummeted not for a circumstantial reason, like weather-driven bumper crops, nor for a cyclical reason like a major buyer’s recession. Though some such factors have been at play in this market, they were marginal compared with the structural fact that Russia, once an agricultural laggard, has joined the industry’s leaders — big time.

The first meaning of this far-reaching development is not about Russia’s place in the world, but about the commodity markets’ beauty.

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Blessed with endless expanses of exceptionally fertile land known as “black earth,” Russia is doing to the grain markets what shale did to oil.

Russia’s annual wheat output, which 20 years ago was just under 35 million metric tons, is expected to cross the 70 million metric ton barrier this year. Nearly half that volume will be exported, making Russian media celebrate Russia’s emergence as the world’s largest wheat exporter.

This is the same Russia that, back when it was under Soviet management, depended on Western grain imports because it failed to use its rich soil to feed its people, a glaring embarrassment that mocked Moscow’s imperial ambitions and inspired its younger leaders’ economic heresy.

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Now, the markets attest that Russia’s agrarian reform has been a smashing success, so much so that U.S. government charts show that Russia has just surpassed Uncle Sam in wheat production.

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Russia’s new agricultural prowess has just made its farm exports surpass its arms sales for the first time ever. Earning $20 billion abroad last year, 15% more than the previous year, agriculture’s evolving centrality in the Russian economy is evidently part of a governmental design.

Modern Agriculture, like pretty much everything else, runs on credit, and theoretically, the international credit markets have been inaccessible to Russia, but they are now the largest exporter of wheat in the world.

Our sanctions were supposed to prevent this, but they don’t because we’ve worn out the proverbial batteries.