PRIMORSKY KRAI, RUSSIA - In what started as a mission to repair ag machinery in Russia, Shane and Heath Peed, both of Fort Dodge, have started creating agricultural opportunities in this farthest eastern Russian region.
Shane Peed has recently moved to this region of the country that is bordered by China on the west, North Korea on the south and Japan on the east across the Sea of Japan. The krai's shape is similar to an appendix wrapping itself around the east border of China.
Although the dominant ag sector in the krai is fishing, Peed said he and his brother have discovered farming and agribusiness opportunities for developing row crop agriculture in the fertile plains of the Sikhote-Alin mountain range.
Forming the Agricultural Holdings International LLC, the brothers are in the process of constructing a grain elevator, establishing a tiling business and a seed dealership.
In addition, Shane Peed said, contacts have been made to work toward trade agreements with China and South Korea to ship grain to both countries during the 2013-2014 marketing year. Their farm manager, Andrew Burton, also lives in Russia.
The Peeds are planning on growing non-genetically modified organism crops. "I don't mind walking beans once a year," he said. "I can handle it."
The krai has a thousand miles of rail service. Its primary city, Vladivostok, was the eastern terminus of the Trans-Siberian Railroad. Of the rail mileage, 345 miles are electrified.
Peed said Ag Holdings is working on railroad agreements for moving ag products to markets.
The krai, with a population of almost 2 million, has 7,850 miles of roads. It's also the financial center of Far East Russia.
Peed said most Russians have collective farm experience, which may be an adjustment for experienced Russian producers to farm in a more conventional manner.
"We're going to experiment with test plots," Peed said, "and work on improving the soil."
He said the Primorsky region is vast and will work well for row-cropping. "Our farmers in Iowa would go nuts to get land like this," Peed said.
Most Primorsky Krai farms are managed by foreigners, he said, "and the Russians know they need the technology and expertise of U.S. farmers."
An immediate market open for investors is upgrading and repairing older farm implements and shipping them to the region. He said it's a win-win situation, bringing more affordable ag equipment to Russia, while creating a market for moving used machines out of the U.S.
"There's a big need for equipment over here," Peed said.
Although many ag producers have a collective farm mentality, Peed said, "the Russians are very good to work with and they are very supportive of us over here."
He said the rail services have the available cars to move grain. "It won't be hard to get rid of the crops," he said.
Noting that he doesn't get back to Iowa often, Peed said the opportunities are vast for new investment in Primorsky Krai. Land is inexpensive, he said, roughly $600 to $1,000 per hectare. A hectare is equivalent to 2.47 acres.
"We're in a global market," Peed said. "There's always risk, but we're not throwing all of our eggs into one basket."
Agriculture Holdings International LLC has scheduled a shareholders meeting in August at the Best Western Starlight Village in Fort Dodge.
Contact Larry Kershner at (515) 573-2141, ext. 453 or email@example.com.