Ukraine taking on bigger export role
With U.S. agriculture struggling to break out of a 19-year drought cycle, global competitors are casting a growing export shadow. In Eastern Europe, Ukraine is giving world grain markets a run for their money.
Based on corn alone, Ukraine’s production has risen from 272 million bushels to 1 billion bushels this year – driven partly by growing modernization and partly by attractive corn prices.
Ukraine’s domestic corn usage is growing just 3% a year, leaving an expanding amount of corn to export. Ukraine now exports more corn annually (650 million bushels) than it was able to grow just 10 years ago.
Advanced by an aggressive export policy, Ukraine’s agriculture ministry has increased its forecast for this year’s grain harvest to an all-time high of 57.9 million metric tons.
“We see the Black Sea area as a rising force,” says Ross Korves, an economic and trade policy analyst for Truth About Trade & Technology (truthabouttrade.org).
Ukraine, which is about the size of Texas, often is referred to as Europe’s breadbasket. Traditionally known for its winter wheat and rapeseed crops, vast tracts of Ukrainian acres have been transformed into corn and soybean production in the past decade to meet the demand from China, Africa, and the Middle East. Ukraine is expected to harvest 26 million tons of corn in 2013 and to export some 16 million tons of that during the 2013-2014 marketing year.
Iowans to Ukraine
The name of the game today in Ukraine is its giant agri-holdings – farms so large that some are equipped with
helipads. International money and foreign know-how are keeping these large farms running profitably.
Its capital, Kiev, is headquarters to an impressive concentration of world-class agribusiness managers who pull strings behind the scenes as they manage millions of acres of prime Ukrainian farmland for global investors.
In an effort to assess the competitiveness of Ukraine, the Iowa Farm Bureau sent a 20-person delegation to the Black Sea region this past summer. The group traveled 2,000 miles by bus, visiting some of the top growers and equipment suppliers.
Tour members were hosted by Iowan Jeffrey Rechkemmer, 59, director of farm operations at FarmGate, in Ukraine’s fertile corn belt where he manages roughly 17,500 acres of corn, soybeans, wheat, barley, and rapeseed.
“We’re a small agri-holding,” he says. “There are a lot of 250,000-acre and 500,000-acre groups around us here.”
The Ukrainian harvest season runs from July 1 to December 15, seven days a week, mostly 24 hours a day. Due to rampant theft, Rechkemmer says equipment left in the field is guarded by its operator until the next shift begins.
Ukraine is renown for its Chernozem belt, a massive black-soil area that stretches from Serbia into northern Bulgaria and southern Romania, to northeast Ukraine, southern Russia, and as far as Siberia. It’s one of only three high-fertility, black-soil regions on the planet. The other two areas are located in Argentina and the U.S. Midwest.