Winnipeg, Manitoba, Canada, Feb. 25, 2003......The dynamic surge by Russia and Ukraine to shed their Communist pasts and become major wheat exporters spells trouble for prairie farmers, said officials at a grain conference yesterday, according to an article by Bill Redekop published in the Winnipeg Free Press on Tuesday.

The former Soviet bloc countries, including Kazakhstan, shocked the world's farmers this year by capturing 20 per cent of the global wheat markets---second only to the United States.

"For almost 100 years (the Soviet Union) deprived Ukraine of being a major grain producer," said Leonid Kozachenko, president of the Ukraine Futures Market, at a conference entitled New Kids on the Bloc, sponsored by the Canadian Wheat Board, wrote Redekop.

Those days are over and the world can expect even greater food production from Ukraine in the future, Kozachenko vowed. He reminded the audience that "before Communism, Ukraine was the bread basket of the world," journalist Redekop wrote, according to the ArtUkraine.com Information Service who monitored the Winnipeg Free Press story.

Members of the audience, like Dauphin farmer Don Dear, said the progress of the former Communist countries signals a new world order in grain exports--one that will make it tougher for Manitoba farmers to compete. Both Russia and the Ukraine are closer to many importing countries.

"They're a few years away from killing us (in markets)," said Don Dear, former president of Keystone Agricultural Producers.

The emergence of those countries dampened wheat prices somewhat this year. However, the negative effect was more than offset by devastating drought in North America and Australia that shot wheat prices to historic highs. Manitoba farmers were fortunate to escape the drought, and many benefited from the higher prices, the Winnipeg Free Press article stated.

The former Soviet bloc countries still have major infrastructure problems to overcome, including a shortage of tractors and combines, and an inability to afford farm inputs like fertilizer and herbicides, officials said.

For example, the number of tractors and combines in Russia have fallen by half in the past eight years, as old machines break down. In the Ukraine, companies like John Deere and Winnipeg tractor manufacturer Buhler Versatile, Inc. are looking to invest to manufacture tractors, Kozachenko said.

The wheat board doesn't think Russia and Ukraine can repeat their performance in the short term. Last year was "an anomaly" because those countries enjoyed their second bumper crop in a row, said Brian White, Canadian Wheat Board analyst, according to ArtUkraine.com who monitored the story from Canada.

"What's more extraordinary to me," said White, "is that here we have three countries who should never have been wheat importers in the first place. This is the return to the natural order," Bill Redekop wrote in his article for the Winnipeg Free Press according to ArtUkraine.com.

White added that Russia and Ukraine produce mainly medium-and low- grade wheat's, whereas farmers in Western Canada are world leaders in the high quality wheat market. However, quality often depends on weather.

Kozachenko said crop yields in the Ukraine are only half those of European Union farmers because Ukrainian farmers can't afford crop inputs like fertilizers and herbicides. Those yields will increase as Ukrainian farmers modernize, he said. Ukraine is blessed with about 40 percent of the world's richest black soil.

Kozachenko added that Ukraine expects to reach private ownership of all farmlands within two years.

Andrei Sozov, publisher of SovEcon periodicals, said more wheat is likely to be used as feed grain because Russian incomes are rising quickly. Higher incomes usually mean a change of diet to more livestock products.

The wheat board also announced its projected wheat prices for 2003-2004 crop year starting Aug. 1. The estimated prices fell about $ 1.50 a bushel across the board for various category wheats and durum wheats. For example, the price of No. 1 Canada Western Red Spring Wheat, 13.5 per cent protein, fell from $ 7.46 per bushel this year to $ 5.88.

That is not necessarily a surprise. The wheat board traditionally errs on the side of caution with its first price estimates, Dewar said.

Even at levels announced yesterday, the wheat prices are slightly above normal, wrote Bill Redekop for the Winnipeg Free Press article, as monitored by the  www.ArtUkraine.com  Information Service in Washington, D.C.