Could Ukraine hold the key to competitive feed prices across Ireland?
With a new government instigating reforms, and a pivot towards Europe, could the so-called ‘bread-basket’ of Europe offers competitive grain prices for both Irish and British livestock farmers?
Ukraine currently exports about 50% of its grain. Half of these exports are shipped to EU28 countries.
With its fertile black earth or Chernozem soils, Ukraine’s agriculture output is mind-blowing. Ukraine has 41m hectares of agricultural land (about 10-times that of the Republic of Ireland’s farmland area). Ukraine’s arable acreage alone amounts to about one-third of the entire EU28 arable land area.
According to statistics from the Ukrainian Agribusiness Club (UCAB), key grain and oilseed crop outputs in 2014 include;
Wheat: 6.3m hectares (15.6m acres) harvested producing 21.9m tonnes of wheat, 43% of which was exported.
Barley: 3.1m hectares (7.5m acres) harvested producing 7.4m tonnes of barley, with one-third going for export.
Soybean: 2.7m tonnes harvested from 1.3m hectares. Just over 60% of this product was exported
Other Oilseeds: Ukraine is the world’s largest exporter of sunflower seeds and oils. Last years harvest produced 10.9m tonnes from 5m hectares. Ukraine also harvested 2.3m tonnes of Rapeseed.
Having achieved a record harvest of over 60m tonnes two years ago, the Ukrainian Agrarian Ministry has set an ambitious target of 100m tonnes by 2020.
However, industry lobby, the Ukrainian Agribusiness Club (UCAB), feels that this is an over ambitious target.
Describing the current market situation in Ukraine UCAB Service Analyst, Yevgeniy Dvornik said its initial estimate for 2015 is a harvest of approximately 50m tonnes.
“We note that the area under spring grains is 9% lower on last year’s figures. This is largely due to cash-flow issues being experienced by some farmers on account on the devaluation of the local currency and the subsequent increase in input costs.”
Dvornik also said it is re continuing to see grain crops in Ukraine evolve away somewhat from barley and wheat towards maize and oilseeds.
“This year’s barley planting area will be approximately three-fifths of the area sown in 2010. Wheat planting is also trending lower, but improved yields have kept overall harvest tonnage up,” he said.
Meanwhile, he says maize production areas have more than doubled since 2010.
“We note that soybean harvested areas have grown from 622,500 hectares in 2010, to 1.3m hectares last year. We predict next years soya plantings to approach close to 1.9m hectares.”
In the past 12 months Ukraine has elected a new president and parliament, signed an Association Agreement with the EU, and embarked on a programme of reforms.
Industry lobby UCAB would like to see this work continue, calling for more land-reforms, reducing bureaucracy, and simplifying the taxation system.
Despite its current difficulties, Ukraine still exported the equivalent of one-million truck loads of grain last year.
As the saying goes, in every difficulty lies an opportunity. Perhaps now the best time for farmer-owned co-ops and millers across Ireland and the UK to evaluate alternative feed sourcing options.