In 2020, Ukrainian farmers faced many problems. Planting during the quarantine, growth of prices of resources, lack of soil moisture during planting, frosts in April, summer drought and defaults negatively affected the country's agricultural sector as a whole. Corn has attracted the most attention among all grains this season. Lack of up-to-date information about crops’ conditions and harvesting progress resulted in high uncertainty as to the forecasts of production and export of corn, and the prices started surging. Ahead of the next planting campaign, APK-Inform asked farmers how these factors had influenced their plans for corn planting in 2021.
For the fifth season in a row, the share of corn exceeds 40% in the total grain production in Ukraine. Corn crop reached record 35.9 mln tonnes in MY 2019/20 MY, while it was only 12.0 mln tonnes 10 years ago. Over these years, Ukraine has turned into one of the leading global corn exporters and gained a reputation as a reliable supplier of high-quality grain.
While planting corn of the harvest-2020, farmers were optimistic about the crop size. In the first half of 2020, many experts forecasted it would surpass the record of 2019/20 MY. However, despite the extension of the area under the grain to the record 5.5 mln ha, corn production turned out lower than in the previous season and was estimated by APK-Inform at 30.0 mln tonnes. Unstable weather was the main reason for this.
The lack of official statistics on harvest volumes of agricultural crops in Ukraine in 2020/21 MY arose a high uncertainty as to the estimation of corn production. APK-Inform conducted a polling of Ukrainian agricultural producers in late January - early February 2021 to understand the yield of corn obtained in 2020, farmers’ production costs and their plans for the next planting campaign.
According to the polling, the highest corn yield was obtained in Ternopil oblast - 112.4 c/ha (+6% to 2019). At the same time, the yield decreased in most other oblasts. Thus, the corn yield in the main areas of its cultivation - Poltava, Chernihiv and Vinnytsia oblasts - amounted to 47.9 c/ha (-25%), 78.4 c/ha (-9%) and 75.5 c/ha (-22%) respectively. Also, a significant decrease of yield was observed in Cherkasy (-57%), Kirovohrad (-57%), Kyiv (-45%) and Dnipropetrovsk (-40%) oblasts.
The lowest corn yield was obtained in Odessa oblast. Some farmers said it did not exceed 10 c/ha.
The pooling revealed that the average corn yield was 59.6 c/ha, down by 28% compared to 2019. According to the State Statistics Committee, as of December 1, 2020, the average corn yield totaled 56.9 c/ha in Ukraine.
Climate was a main complication with corn production that farmers faced in 2020. The unpredictability of weather conditions played a cruel joke with farmers. In particular, according to poll, slightly over 80% of farmers responded that corn plantings have suffered from drought the most. Soil moisture deficit prevented plantings from normal development and filling grain. The drought has been observed the most in Kirovohrad, Cherkasy and Vinnytsia oblasts, as yield decline in these regions prove.
The drought was not the only challenge for farmers in 2020. More than 9% of respondents said that the crops suffered from the complex of negative agrometeorological phenomena – spring frosts and summer drought. At the same time, only 4% of respondents reported spring frosts to have caused the negative affect. Around 6% of respondents, apart from abovementioned, also mentioned hail, moisture abundance during the harvest, hot winds, etc, among the other problems.
Speaking of expenditures for corn production in 2020, they have not changed for more than 45% of farmers, for 34% - the costs increased by less than 10%, for 18% - the costs increased by 10-30%.
But there were also farmers (3%) whose production costs increased by more than 30% in 2020 compared to 2019.
Considering the problems Ukrainian farmers faced in 2020 in terms of corn production, and remembering the significant corn price rise in 2020/21 MY compared to previous season, there is a question rises of changes in areas under the corn for 2021-crop.
During the active period of the poll (end of January, 2020 – beginning of February, 2021), 57% of the respondents plan to leave the areas unchanged, 18% plan to cut the areas, 13% - to increase, and 13% of respondents have not decided the plans for planting campaign-2021 yet.
Making a decision what to plant, farmers first of all take into consideration weather conditions and soil moisture, at the same time remembering the crop rotation. Also, price plays an important role in decision-making, together with winter crops conditions and availability and affordability of financial and other resources.
Farmers in the main regions, where there is a considerable corn yield decline in 2020, are more likely to reduce plantings of this grain in 2021. For example, in Kirovograd oblast the farmers informed about the plans to cut areas under corn in 2021 by 53% in average compared to the current season. In Cherkassy oblast – by 51%, and in Dnipropetrovsk and Kharkov oblasts – by 21% and 19% respectively.
Farmers in Ternopil, Zhytomyr and Sumy oblasts, where a rather high corn yield was received, on the contrary plan to widen planting areas under the grain in 2021, by 13%, 5% and 4% respectively.
In Ukraine, the poll results demonstrate that corn planting areas are expected to decline on average by 14% compared to 2020. But, taking in to account quite high share of undecided respondents and high level of demand and prices for corn together with favorable weather for planting, these figures may not be justified and the total planting areas under corn in Ukraine may reach previous season results.
The main factors, limiting the increase of corn areas in Ukraine, are the following:
- crop rotation and positive forecasts of winter crops condition;
- increase of global production and expected growth in world corn trade due to the South American countries;
- high risks of global quarantine restriction, that will influence the food products trade.
Traditionally, the real areas and volumes of corn production are known with time. Speaking of forecasts, considering the current factors, they are quite positive and in a future season Ukraine is expected to preserve a status of one of the key corn suppliers on the global market.
By Victoria Rozhko