01 February 2016
Ukrainian Agri- Market
During last ten years average sown area of agricultural crops in Ukraine made close to 27-28 mln ha, thereof about 15 mln ha – grains&leguminous crops. Loss of Crimea and part of Donbass led to decrease of total area under crops by about 1.5 mln ha, so that in Y2015 sown area made 26.7 mln ha (grains – 14.6 mln ha).
In the structure of sown area by products during last years the share of corn, sunflower seeds and soybeans significantly increased mainly at account of fodder crops and other grains:
Wheat remains main traditional crop for Ukrainian farmers, moreover, in a view of less net cost per 1 ha vs., for example corn, (especially important in period of farmers working capital shortage, which took place during last couple of years) and rather good yields, it regained additional popularity:
Year
Harvest area, k ha
Yield per 1 ha, tons
Total harvest, k tons
2005
6 571
2.85
18 699
2006
5 511
2.53
13 947
2007
5 951
2.34
13 938
2008
7 054
3.67
25 855
2009
6 753
3.09
20 866
2010
6 284
2.68
16 844
2011
6 657
3.35
22 324
2012
5 630
2.80
15 761
2013
6 566
3.39
22 278
2014
6 015
4.01
24 121
2015
6 833
3.88
26 491
Average net cost per 1 ha for wheat is estimated in the range USD 400-500, while for corn it is two times higher.
Like for main part of other Ukrainian crops wheat yields have clear growing trend, mainly in a view of fundamental factors such as application of better technology, better seeds quality and more fertilizers usage. Market consolidation (though not very fast during last period of time because of scarcity of financing sources and worse general market conditions, due to which financial performance of agri-holdings worsened, not allowing them to expand as quickly as they did in Y2011-13) can be considered as additional reason of yields growth trend.
Weather conditions during last two seasons have been especially favorable for wheat production, which resulted in record-high yields per 1 ha and total harvest (allowing also to export record volumes). Situation is expected to change in current season because of unfavorable weather conditions during autumn sown campaign. According to the State Statistics Service, Ukraine planted winter wheat for the harvest-2016 throughout the areas of 6.0 mln ha, a decrease of 12% compared with last year, the losses areas are estimated at the minimum rate of 5%.
Above-mentioned situation with winter crops (not only wheat, but also rapeseeds and barley) will lead to increase of sown area under spring crops in current season.
Last years’ statistics for corn looked as follows:
Year
Harvest area, k ha
Yield per 1 ha, tons
Total harvest, k tons
2005
1 660
4.32
7 167
2006
1 720
3.74
6 426
2007
1 903
3.90
7 421
2008
2 440
4.69
11 447
2009
2 089
5.02
10 486
2010
2 648
4.50
11 919
2011
3 544
6.44
22 838
2012
4 370
4.79
20 922
2013
4 825
6.40
30 900
2014
4 625
6.16
28 500
2015
4 100
5.73
23 500
Corn has been the most marginal crop during FYs2010-2013, it became especially popular among large agro-holdings, so that sown area under corn significantly increased. In Y2015 sown area decreased in a view of lack of working capital which forced part of farmers to shift from corn towards less “expensive” crops. After high levels of yields per 1 ha in FYs2013-14 because of draught in August’15 in several regions of Ukraine, in Y2015 average net yield declined (at that it still remains on relatively high levels).
Soybeans and Sunflower seeds popularity also increased during last years, because of relatively (vs. corn) lower net costs per 1 ha and rather good profitability (for soybeans – till current season). As a result both sown area and yields increased:
Soybeans
Year
Harvest area, k ha
Yield per 1 ha, tons
Total harvest, k tons
2005
422
1.45
613
2006
715
1.24
890
2007
583
1.24
723
2008
538
1.51
813
2009
623
1.68
1 044
2010
1 037
1.62
1 680
2011
1 110
2.04
2 264
2012
1 411
1.71
2 410
2013
1 351
2.05
2 774
2014
1 800
2.17
3 900
2015
2 100
1.79
3 761
Sunflower seeds
Year
Harvest area, k ha
Yield per 1 ha, tons
Total harvest, k tons
2005
3 743
1.26
4 706
2006
3 964
1.34
5 324
2007
3 604
1.16
4 174
2008
4 306
1.52
6 526
2009
4 232
1.50
6 364
2010
4 572
1.48
6.772
2011
4 739
1.83
8 671
2012
5 194
1.61
8 387
2013
5 051
2.19
11 051
2014
5 257
1.93
10 134
2015
5 003
2.23
11 165
In current season soybeans harvest was less than expected mainly in a view of already mentioned draught in August, while sunflower seeds are less susceptible to negative effect from draught, so that in Y2015 record-high sunflower seeds harvest was demonstrated. Currently sunflower seeds are considered the most profitable (on average) crop for farmers, along with it, crops rotation practices assume that suflowers can be sown on the same land once in 5 years at most (better once in 7 years). It means that potential for sown area under sunflowers increase is almost exhausted. On the other hand soybeans is very good from crops rotation perspectives, so that despite temporary decrease of its profitability, one can expect further increase of sown area and yields (mainly because of better technology and seeds quality application) in the future.
As for new season, according to the State Statistics Service, Ukraine planted winter crops for the harvest-2016 throughout the areas of 7.8 mln ha, a decrease of 13% compared with last year (9 mln ha). In particular, winter wheat planted areas reached 5.98 mln ha (down 12%), winter barley - 983.4 thsd ha (down 11%), winter rye - 145.3 thsd ha (down 12%), and winter rapeseed - 655.2 thsd ha (down 26%). Serious drought during the autumn planting campaign became the main reason for such significant reduction of the planted areas under winter crops. As a result, one can expect that sown area under spring crops – corn, soybeans sunflower and, may be, sunflowers (though such increase can not be sustainable from general crop rotation perspectives).