Grain industry leaders are playing down the significance of a Russian ban on grain exports for the rest of the year following devastating drought and fires in the country.

20% of Russia’s wheat crop has been destroyed this northern summer, and wheat prices have already jumped 70% on world markets as a result.

But Federated Farmers economics spokesman Philip York says such market shortages are common, and the deficit will be met.

 “I’ve heard it all before – there’s going to be a shortage because of this hot spell in Russia. In theory that’s fine, but in practice often you suddenly find that somewhere else discovers a lot more grain from somewhere and the price jumps up for a wee while and then drops back again.

"I still keep going on about volatility and I think this is maybe just part of the mix.”

Mr York says returns for local grain are almost unsustainably low, and farmers are concentrating on staying afloat rather than capitalizing on international price movements.

 “I just heard that they were talking about they weren’t going to plant. Maybe put grass in or something like that and have dairy grazers or even in some cases they may have put kale in so they can have dairy cattle on over the winter.”

Dairy commodity prices are also expected to firm on the news from Russia.

Dairy prices are closely linked to grain, as much overseas milk production is grain-based.