A drop in the harvest by 11%, a decline in exports of grains and oilseeds by 13%, a collapse of the berry industry by 50%. These are the results that 2020 brought to Ukrainian farmers. However, big business is not particularly upset about this, since it has access to cheap money and access to foreign markets. Farmers, on the other hand, are calculating losses and thinking about how to survive 2021. Moreover, the state practically does not help them.
The agro-industrial complex strenuously resisted the crisis, but failed. Since March, the volume of agricultural production in Ukraine has been falling. According to the State Statistics Service, in January-August 2020, the agricultural production index compared to the same period in 2019 amounted to 90,2%. That is, a reduction of almost 10%. In the past year, all the bumps fell at once on the farmers: a pandemic, quarantine, a drop in demand for certain product groups, weather disasters.
As a result, producers' profits are falling, and they are looking for salvation in foreign markets. Rising food prices in the world can somehow improve the situation. For example, the price index of the Food and Agriculture Organization of the United Nations (FAO), which reflects the change in the cost of basic foodstuffs, was 97,9 points in September. This is 2,1% higher than in August and 5% higher than in September 2019.
Victories are in the past
No matter how much we would like, but in 2020 there will be no next record harvest. It was all the fault of the weather, which was against the farmers all year round. No precipitation and a warm winter, spring with temperature drops, drought in late summer and early autumn greatly affected the yield. Therefore, the gross harvest of the main grain and oilseeds will be at the level of 87,5 million tons. This forecast was announced by "Dengam" and. about. Executive Director of the Ukrainian Grain Association (UGA) Serhiy Ivashchenko. Compared to 2019, this is almost 11 million tons, or 11%, lower.
Moreover, experts are revising estimates of the yield downward for almost all crops. “We had to worsen the forecast of wheat harvest by 1,6 million tons - to 25,2 million tons, barley - by 0,9 million tons, to 7,8 million tons, and corn - by 2,2 million tons. ., up to 29,6 million tons. We revised the forecast for sunflower harvest from 14,3 to 13,3 million tons, and soybeans - from 3,1 to 3 million tons, ”says Maria Kolesnik, Deputy Director of ProAgro Group.
These estimates really correspond to reality. According to data released by the Ministry of Economic Development on November 2, wheat and barley have already been fully harvested. The harvest amounted to 25,1 and 7,8 million tons, respectively (see table). Agrarian corn harvested 17,6 million tons from 66% of the sown area. Sunflower harvesting is already at the finish line: 95% of the area has been threshed and 12,1 million tons harvested. And it is unlikely that agricultural producers will be able to hold out the sunflower harvest from the remaining lands to last year's, which amounted to 14,5 million tons.
Due to the fall in production volumes, the export of grains and oilseeds will decrease. According to UZA estimates, in 2020 it will amount to almost 54 million tons, which is 13%, or 8 million tons, lower than in 2019.
ProAgro analysts believe that in the 2020/2121 marketing year, Ukraine will be able to supply 48 million tons of grain to foreign markets against 55,6 million tons in 2019/2020. Of this volume, 17,5 million tons - wheat, 4,4 million tons - barley, 25,5 million tons - corn.
Looking forward to 2021
But the sowing of winter crops is going quite well. According to the Ministry of Economic Development and Trade, by November 2, farmers have sown the main winter crops on an area of 7,5 million hectares (91% of the forecast). Wheat sown 5,65 million hectares (92% of the forecast), barley - 867 thousand hectares (92% of the forecast), rye - 119 thousand hectares (89% of the forecast), rapeseed - 863 thousand hectares (85% to the forecast).
At the same time, agricultural producers have a chance to harvest a higher harvest in 2021. First, according to the Ministry of Economic Development, the area of land sown with winter crops will grow by 600 thousand hectares - up to 8,2 million hectares. True, not under all cultures. If the area under wheat increases from 5,65 million hectares to 6,1 million hectares, then the area under barley will decrease from 1,06 million hectares to 0,95 million hectares, and under rapeseed - from 1,2 million hectares. up to 1 million hectares.
Secondly, the weather favors sowing and is favorable for the start of winter crops. The prolonged heat allowed the field work to be continued until late autumn, and the rains in late October improved soil moisture, which gives hope for healthy and strong seedlings.
Berry with losses
Farmers and farms that grow berries are in the most difficult situation. For them, 2020 is one of the most unfortunate years. Again, due to the climatic swing, the berry growers received a yield one and a half times lower than in 2019. “Many people talk about a fall of 10-15%. But in reality, the harvest fell by 40-60%. The most significant losses were due to frosts in the spring and rains in June, ”explains Yaroslav Movchun, co-owner of the Ozeryana berry farm. By the way, it was not for nothing that the berries were expensive at retail all summer, the farmers tried to cover their losses.
Moreover, Ukraine has even increased the import of berries and nuts. According to the Ukrainian Fruit and Vegetable Association (UPOA), in January-June 2020, imports amounted to 443 thousand tons, which is 11% more than in the same period in 2019. Import of stone fruits (apricot, peach, cherry, plum) increased by 16,6%, while import of fresh berries - by 17,9%.
With late fruits, the main of which is an apple, not everything is good either. The harvest will be approximately the same as in 2019 - within 1 million tons. And last year was one of the worst for Yabloko in 10 years. In addition, frost in spring and drought in summer affected the quality of the fruit. So, really good and tasty apples will be up to 20% of the total harvest.
What is the threat? High prices on store shelves and the prevalence of imported fruits, imported mainly from Poland.
Vegetables, meat, eggs
The potato harvest in 2020 will not be better than in 2019. According to the estimates of the Deputy Minister of Economic Development, Trade and Agriculture Taras Vysotsky, potato production will amount to about 20 million tons. According to the State Statistics Service, in 2019, farmers harvested 20,2 million tons. And it was the worst harvest since 2010. As a result, about 400 thousand tons of imported potatoes got to Ukraine, and prices for it soared at times.
In January-August 2020, potato imports increased six times compared to the same period in 2019. Key suppliers - Belarus, Netherlands, Russia. Considering that the harvest is not so hot again, it is definitely not worth waiting for a decrease in potato prices.
Vysotsky also said that the harvest of the remaining vegetables in 2020 will be about 9 million tons, which means a 2019-7% drop compared to 8. This is already reflected in prices. In October, the price of tomatoes, according to UPOA, was, on average, 23% higher than a year earlier.
In animal husbandry, the situation is somewhere better, somewhere worse than a year earlier (see table). For example, in January-September, production of pork hams and shoulder blades increased by 64%, while pork carcasses decreased by 2,7%. The production of veal and beef carcasses, half carcasses, quarters fell by almost 30%. Production of chicken and chicken meat fell by 10%, while turkey meat, on the contrary, increased by 12,3%. Milk and cream production volumes dropped by 5-10%.
Egg production in the first nine months of 2020 decreased by 1,3% or by 173,2 million pieces - to 12,8 billion pieces.
Agroexport could not resist
According to the Ukrainian Agribusiness Club, in January-August 2020, the export of agricultural products on an annualized basis in monetary terms decreased by 0,8% - to $ 13,7 billion. Yes, this is not fatal. But the downward trend in supplies is evident. Especially when you consider that in 2019 the export of agricultural products increased by 2018% compared to 19.
The largest decline in exports of seeds and fruits of oil-bearing plants, industrial and medicinal plants, by more than 36%, the supply of flour, malt, starch, processed vegetables decreased by 19%, sugar, eggs and dairy products by 14%, by 9% - vegetables, 7,5% - meat and 1% - grain.
At the same time, manufacturers increased the export of finished products from cereals, flour, starch, and milk by 14%. Sales of vegetable oils and fats of animal origin increased by 20%.
The main disadvantage of Ukrainian agro-export is that its structure is predominantly raw materials. That is, it is mainly grain, oils, fruits and vegetables (fresh or frozen), meat. There are few finished, processed products. If we analyze the structure of the TOP 15 agricultural exports, 37% is grain, 23% is vegetable oils and animal fats, 13% is finished food products, 6% is food processing residues, 5% is oilseeds, 5% is animals and 3% - meat and offal.
Therefore, agricultural producers earn less, as they directly depend on world food prices. But if the supplies consisted mostly of finished goods with high added value, the crisis would not have hit the incomes of Ukrainian business so hard.