Ukraine: Impact of the War on Agriculture Profitability
The study conducted by UCAB.ua and Minagro with the support of the Global Facility for Disaster Reduction and Recovery (GFDRR) , administered by the World Bank.
Content of the study
1. Profitability of grains and oilseeds production in April 2024
2. Main factors of change for the last 3 months (April 2024 vs January 2024)
3. Features of fertilization during the spring sowing season 2024
4. Updated forecast of profitability in 2024 5. Costs and prices of major grains and oilseeds 6. Profitability of livestock products
- the profitability of all types of grain and oil crops increases, which is connected with the restoration of export sea routes, which reduced the cost of logistics and allowed to increase purchase prices on the domestic market;
- in the world there is a clear trend of price reduction for all types of grain and oil crops. Over the past 6 months, the price on world markets has decreased: grain - -8%; oily - -14%. At the same time, prices are increasing on the Ukrainian market, during the last 6 months prices at elevators have increased: by 38% - for grain crops and by 14% - for oilseed crops compared to the same period last year;
- in April 2024, the cost of logistics will decrease compared to January 2024: to the ports of Odesa region -18%; to the port of Constanta through the river ports of the Danube -29%;
- the tendency to decrease the average rates of fertilizer application in the industry continues. Although in the autumnt of 2023 there was a recorded increase in fertilizer application rates for winter crops, in the spring of 2024 the application rates decreased again - on average by 5% compared to the same period last year;
- the situation in the livestock sector since the beginning of 2024 has been generally stable: most types of production remain profitable, except for beef production. However, in April 2024, a decrease in production profitability was observed for all types of products, except for poultry. This was influenced by the increase in prices of barley and corn in the domestic market, a seasonal decrease in milk prices, and a decrease in pork prices due to increased supply in the domestic market.
In addition, a higher level of profitability is expected based on the results of 2024:
- sunflower - at the level of 45 dollars. USD per ton (-4 USD/t in 2023);
- soybeans - at the level of 83 dollars. USD per ton ($69/t in 2023);
- rapeseed - at the level of 78 dollars. USD per ton ($5/t in 2023).
Unfortunately, grain production will remain unprofitable.