1973 United States–Soviet Union wheat deal

Large Soviet purchases of U.S. grain negotiated in 1972 and delivered into 1973 The 1973 United States–Soviet Union wheat deal was a series of large Soviet purchases of American wheat and other grains. It was negotiated with private U.S. exporters during July and August 1972, with deliveries scheduled through August 1973.Staats, Elmer B. Statement of Elmer B. Staats, Comptroller General of the United States, before the Senate Committee on Agriculture and Forestry: The Russian Wheat Sales and Agriculture's Role in Expanding U.S. Wheat Exports U.S. General Accounting Office March 8, 1973 https://www.gao.gov/assets/094557.pdf December 25, 2025 The Soviets contracted for about 440 million bushels of wheat (roughly US$700 million) along with additional grain purchases, tightening world supplies and contributing to sharp rises in grain and food prices in 1972–1973.Luttrell Clifton B. The Russian Wheat Deal—Hindsight vs. Foresight Review Federal Reserve Bank of St. Louis October 1973 2–9 https://files.stlouisfed.org/files/htdocs/publications/review/73/10/Russian_Oct1973.pdf December 25, 2025 The sales were facilitated by a July 1972 U.S. government credit agreement making up to US$750 million available over three years for Soviet purchases of U.S. grains, and by export-subsidy mechanisms that supported contracting at fixed export “target” prices despite rising domestic market prices. In the United States the episode became widely known as the “Great Grain Robbery” (or “Great Russian Grain Robbery”), and Congress subsequently mandated an export sales reporting system in 1973 to improve transparency around large agricultural export transactions.FACT SHEET: USDA's Export Sales Reporting Program U.S. Department of Agriculture, Foreign Agricultural Service https://apps.fas.usda.gov/info/factsheets/expsls.pdf December 25, 2025 Background thumb|left|The Madison hotel in Washington, D.C., where negotiations took place|alt=Multistory building Soviet grain output was highly variable and, by the early 1970s, the USSR was increasingly supplementing domestic supplies with imports.Butler Nick Soviet Agriculture and US-Soviet Grain Agreement Intereconomics September–October 1982 17 5 211–214 https://www.econstor.eu/bitstream/10419/139820/1/v17-i05-a02-BF02928190.pdf 25 December 2025 Analysts attributed this dependence to a combination of climatic risk - much of the Soviet grain area lay in regions where precipitation and growing seasons were only marginally adequate for reliable grain production, and structural weaknesses in Soviet agriculture such as poor management, weak incentives and significant waste in the farm system. In 1972 the USSR suffered heavy winterkill of winter grains following severe frosts with little or no snow cover, followed by a drought and unusually hot conditions over much of the European USSR during the growing season; in some areas east of the Urals, wet conditions also complicated harvesting.The Agricultural Situation in Communist Areas: Review of 1972 and Outlook for 1973 ERS-Foreign 350 U.S. Department of Agriculture, Economic Research Service 11 April 1973 https://esmis.nal.usda.gov/sites/default/release-files/jq085j963/js956k123/3r074z43v/ERSF-04-11-1973_Communist_Areas.pdf 25 December 2025 The USSR's reported gross output of grain and pulses in 1972 was about 168 million tonnes (bunker weight), down from 181.2 million tonnes in 1971. As crop prospects deteriorated, the Soviet government purchased roughly 28 million tonnes of grain abroad for delivery in 1972–73, including about 18 million tonnes from the United States. Contemporary analyses of the 1972–73 price spike treated the Soviet shortfall as a major factor tightening world grain markets.Schnittker John A. The 1972–73 Food Price Spiral Brookings Papers on Economic Activity 1973 2 https://www.brookings.edu/wp-content/uploads/1973/06/1973b_bpea_schnittker.pdf 25 December 2025 Later meteorological analyses comparing major events in the region noted that the summer of 1972 produced heat extremes in parts of Eastern Europe comparable to those seen in 2010, although 2010 set new records in many station series.Friedrich Karsten Bissolli Peter Analysis of Temperatures and Precipitation recorded at stations in Eastern Europe during the heat wave in summer 2010 Deutscher Wetterdienst (DWD), Business Area Climate and Environment 24 January 2011 https://www.dwd.de/DE/leistungen/besondereereignisse/temperatur/20110124_hitzewelle_russland_de.pdf?__blob=publicationFile&v=4 25 December 2025 Event right 320 Nikolai Patolichev.jpg A photo of former Soviet Minister of Foreign Trade Nikolai Patolichev. Soviet Minister of Foreign Trade Nikolai Patolichev Earl Lauer Butz - USDA portrait.png A photo of former U.S. Secretary of Agriculture Earl Butz. U.S. Secretary of Agriculture Earl Butz The main negotiations for the deal took place on June 20, 1972, at The Madison hotel in Washington, D.C., with two Soviet teams, one led by foreign trade minister Nikolai Patolichev and the second led by Nicolai Belousov. On the American side were multiple representatives of American grain businesses and officials representing the U.S. government.https://www.cia.gov/library/readingroom/docs/CIA-RDP80-01601R000300340010-4.pdf The Big Soviet Wheat Deal Fialka John 29 October 1972 CIA dead https://web.archive.org/web/20170123160330/https://www.cia.gov/library/readingroom/docs/CIA-RDP80-01601R000300340010-4.pdf January 23, 2017 21 January 2020 This included Michel Fribourg, the CEO of grain trading firm ContiGroup Companies (formerly Continental Grain), and Carroll Brunthaver, the U.S. Under Secretary of Agriculture for Farm and Foreign Agricultural Services.Albright Joseph https://www.nytimes.com/1973/11/25/archives/some-deal-the-full-story-of-how-amepnka-got-burned-and-the-russians.html The full story of how Amepиka got burned and the Russians got bread 1973-11-25 The New York Times 2020-01-22 live https://web.archive.org/web/20190330192823/https://www.nytimes.com/1973/11/25/archives/some-deal-the-full-story-of-how-amepnka-got-burned-and-the-russians.html March 30, 2019 36 en-US 0362-4331 In early July 1972, the U.S. government negotiated an arrangement that allowed the Soviets to buy up to $750 million of American grain on credit, over a three-year timespan.Times Philip Shabecoff Special to The New York 1972-07-09 Moscow Agrees to Buy U.s. Grain for $750-Million en-US 1 The New York Times https://www.nytimes.com/1972/07/09/archives/moscow-agrees-to-buy-us-grain-for-750million-credits-planned.html 2020-05-22 0362-4331 However, the Soviets quickly exceeded their credit limit, spending the $750 million in only one month.https://www.thecrimson.com/article/1973/11/16/america-gets-the-shaft-pthe-1972/ America Gets the Shaft The Harvard Crimson live https://web.archive.org/web/20161201071632/http://www.thecrimson.com/article/1973/11/16/america-gets-the-shaft-pthe-1972/ December 1, 2016 2020-01-21 By September 1972, the Soviets are thought to have spent up to US$1 billion on grain from companies in the United States, and more from other countries such as France, Canada, and Australia.Jensen Michael C. https://www.nytimes.com/1972/09/29/archives/soviet-grain-deal-is-called-a-coup-capitalistic-skill-surprised.html Soviet Grain Deal Is Called a Coup 1972-09-29 The New York Times 2020-01-17 live https://web.archive.org/web/20190712162539/https://www.nytimes.com/1972/09/29/archives/soviet-grain-deal-is-called-a-coup-capitalistic-skill-surprised.html July 12, 2019 1 en-US 0362-4331 The U.S. government spent $300 million subsidizing the grain purchases, still unaware that the Soviets had suffered massive crop shortfalls in 1971 and 1972. One reason the government did not realize the impact the deal would have is that many officials, such as Earl Butz, were convinced that the Soviets were purchasing the grain only to feed their livestock.Destler I. M. 1978 United States food policy 1972–1976: reconciling domestic and international objectives International Organization en 32 3 617–653 10.1017/S002081830003188X 154693901 1531-5088 By not realizing that global wheat stocks were low, and discounting reports of Soviet crop failure, the United States inadvertently contributed to domestic food prices rising, using public funds to do so.https://earthzine.org/the-great-grain-robbery-of-1972/ The 'Great Grain Robbery' of 1972 Powers Rachel Chenven 2015-10-29 Earthzine en-US 2020-01-17 Aftermath and international consequences Weeks after the grain deal was announced, the Earth-observing satellite Landsat 1 achieved orbit. If the satellite had launched a few months earlier, the deal may have been reconsidered or never have happened at all, because American negotiators could have realized the scale of Soviet crop failures.I Spy Thy Rye. Satellites can help gauge crop yields and predict famine, by Dave Levitan http://www.nxtbook.com/nxtbooks/ieee/spectrum_na_0613/index.php#/48 June 1, 2013 Spectrum.IEEE.org June 10, 2019 The event helped lead the U.S. government to seek more information about global agricultural output via infrared satellite intelligence. After the deal, many Americans were concerned about businesses having advantages in similar situations due to their early access to information.About the Export Sales Reporting Program USDA Foreign Agricultural Service https://www.fas.usda.gov/programs/export-sales-reporting-program/about-export-sales-reporting-program www.fas.usda.gov live https://web.archive.org/web/20170226173828/https://www.fas.usda.gov/programs/export-sales-reporting-program/about-export-sales-reporting-program February 26, 2017 2020-01-24 In a ten-month span in 1973, global food prices rose by at least 30 percent and some sources claim up to 50 percent.https://www.businessinsider.com/russia-wheat-food-crisis-2010-8 Russia's Wheat Problem Could Be Just The Beginning Of A Global Food Crisis 8 August 2010 Business Insider live https://web.archive.org/web/20200129142532/https://www.businessinsider.com/russia-wheat-food-crisis-2010-8 January 29, 2020 2020-01-29The Great Grain Robbery Trager James 1975 Ballantine New York 0345241509 233https://www.gao.gov/products/CED-78-170 What Causes Food Prices To Rise? What Can Be Done About It? 8 September 1976 U.S. Government of Accountability Office live https://web.archive.org/web/20190419062018/https://www.gao.gov/products/CED-78-170 19 April 2019 26 March 2020https://www.nytimes.com/1974/02/15/archives/food-price-rise-at-73-rate-seen-us-says-jump-could-equal-last-years.html Food Price Rise at '73 Rate Seen 1974-02-15 The New York Times 2020-01-17 30 en-US 0362-4331 In some British markets there was a reported 87 percent increase on the price of an 800 g oz loaf of bread.https://www.theguardian.com/world/2010/aug/08/russia-wheat-prices-bread Global wheat crisis recalls Moscow's 'great grain robbery' Smith Alex Duval 2010-08-07 The Observer 2020-01-21 live https://web.archive.org/web/20190611105101/https://www.theguardian.com/world/2010/aug/08/russia-wheat-prices-bread June 11, 2019 en-GB 0029-7712 Global wheat stocks decreased exponentially; Australia was hit the hardest with a 93 percent decrease by 1974 from 1971.http://www.ers.usda.gov/amber-waves/2009/march/agricultural-commodity-price-spikes-in-the-1970s-and-1990s-valuable-lessons-for-today USDA ERS – Agricultural Commodity Price Spikes in the 1970s and 1990s: Valuable Lessons for Today www.ers.usda.gov live https://web.archive.org/web/20191208082149/https://www.ers.usda.gov/amber-waves/2009/march/agricultural-commodity-price-spikes-in-the-1970s-and-1990s-valuable-lessons-for-today/ December 8, 2019 2020-01-17 Not all nations were equally hit; some, such as Canada, benefited from the deal. Canadian farmers had sold their wheat to the Canadian Wheat Board, which were able to pool stocks and sell as a collective.https://harvest.usask.ca/bitstream/handle/10388/ETD-2012-08-629/LARSEN-THESIS.pdf?sequence=3&isAllowed=y Repurposing the Great Grain Robbery in Canada Larsen Laura 2012-08-01 University of Saskatchewan 2020-01-17 Contemporary U.S. media referred to the event as "The Russian Wheat Deal" or "The Soviet Wheat Deal".Luttrell Clifton B. The Russian Wheat Deal – Hindsight vs. Foresight, Reprint No. 81 Federal Reserve Bank of St. Louis October 1973 http://research.stlouisfed.org/publications/review/73/10/Russian_Oct1973.pdf July 26, 2011 https://web.archive.org/web/20110728061221/http://research.stlouisfed.org/publications/review/73/10/Russian_Oct1973.pdf July 28, 2011 liveAlexander Holmes Who was the real villain in Russian wheat deal? Rome News-Tribune September 6, 1974 https://news.google.com/newspapers?nid=348&dat=19740906&id=XbEFAAAAIBAJ&pg=5222,714560 July 26, 2011 https://web.archive.org/web/20160424032127/https://news.google.com/newspapers?nid=348&dat=19740906&id=XbEFAAAAIBAJ&sjid=LjMDAAAAIBAJ&pg=5222,714560 April 24, 2016 live Google News The term Great Grain Robbery is a pun referring to the 1963 Great Train Robbery and it is generally accepted that it was coined by Senator Henry M. Jackson.https://www.washingtonpost.com/archive/business/1979/06/10/the-shadowy-world-of-grain-trade/354b11cd-6dc2-4ac0-b047-51dd7e9ffe83/ The Shadowy World of Grain Trade Morgan Dan 10 June 1979 Washington Post 24 January 2020 References Further reading Merchants of Grain Morgan Dan 1979 Viking New York Nation: The Great Wheat Deal Time Magazine New York Oct 18, 1963 http://content.time.com/time/magazine/article/0,9171,873744,00.html March 11, 2020 September 23, 2019 https://web.archive.org/web/20190923072635/http://content.time.com/time/magazine/article/0,9171,873744,00.html dead http://archive.gao.gov/f0102/090149.pdf Examination Into Feed and Related Matters Staats Elmer April 30, 1973 March 11, 2020 July 21, 2011 https://web.archive.org/web/20110721041445/http://archive.gao.gov/f0102/090149.pdf dead http://archive.gao.gov/f0302/096148.pdf Russian Wheat Sales and Weaknesses in Agriculture's Management of Wheat Export Subsidy Program Staats Elmer July 9, 1973 March 11, 2020 July 21, 2011 https://web.archive.org/web/20110721041843/http://archive.gao.gov/f0302/096148.pdf dead http://archive.gao.gov/f0302/096760.pdf Exporters' Profits On Sales Of U.S. Wheat To Russia Staats Elmer February 12, 1974 March 11, 2020 July 21, 2011 https://web.archive.org/web/20110721041105/http://archive.gao.gov/f0302/096760.pdf dead Amber Waves of Grain Trager James 1973 Arthur Fields New York 0-525-63010-4 243 https://archive.org/details/amberwavesofgrai0000trag/page/243 collapsed Category:1972 in the United States Category:Soviet Union–United States relations Category:Agricultural subsidies Category:United States agricultural policy Category:Foreign trade of the Soviet Union Category:1972 in the Soviet Union Category:Grain trade