Record Harvest of Corn and Wheat Expected in Ukraine

Maize (Corn)

Wheat

Ukraine

Published Nov 19, 2021

According to the Ukrainian Agriculture Ministry, Ukrainian farms have harvested 73.4 MMT of grains so far in MY 2021/22, including 32.3 MMT of wheat and 28.1 MMT of corn. With favorable weather conditions, Ukraine is expected to set records in both crops and even reached a historical harvest record on grain production of 80.3 MMT. For MY 2021/22, corn production is forecast to increase by 29% to 39 MMT from the previous year, while wheat output is expected to rise by 27% to 32.1 MMT. The record harvest could make grain exports reach 61.5 MMT for the MY 2021/22 season, with both corn and wheat exports projected to increase by 41% from the previous export season.

According to a recent Global Agricultural Information Network report from the Foreign Agricultural Service of the US Department of Agriculture (USDA), Ukraine is close to setting a record year on grain production after the MY 2021/22 harvest is 91% complete at 73.4 MMT. With the yield averaging 5.08 tonnes per hectare, Ukraine has already harvested 15 MMT tonnes more than the 65 MMT harvested in the previous MY 2020/2021. The Ukrainian government prioritized recovering its grain production capacity after a disappointing year when corn and wheat production was low.

Corn and Wheat Production Rebound

Last year a record high price for corn on the world market was seen due to limited supply caused by harsh weather conditions in several producer countries, including Ukraine, and increasing demand from the global market. Ukraine’s MY 2020/2021 production was plagued by bad weather, which led to smaller planted areas and reduced yield, reducing the output to 27.6 MMT, a 23% decrease from the previous year. However, according to preliminary estimates, 39 MMT of corn will be harvested in MY 2021/22, 28% higher than the previous year, seeing a clear rebound in production.

Source: Tridge, FAOSTAT

Favorable weather conditions this year allowed farmers to obtain good yields of corn. According to estimates, the yield per corn will be 70.7 cents per hectare, which is 26% higher than last year. However, the best historical indicator for the yield was in MY 2017/18, when the yield of corn was 78.4 cents per hectare. Also, for MY 2020/21, the sown area under the corn crop was increased by 11% to 5.5 million hectares. It is expected that weather conditions will allow the corn harvest to be completed without almost any loss during the rest of the season.

In the case of wheat, the output is expected to rise by 27% to 32.1 MMT, which will also represent a remarkable recovery for wheat farmers. In MY 2020/21, wheat production fell to 23.4 MMT, a 17% decrease from the previous year, recording a low production year. However, according to the Agricultural Ministry, as of November, wheat farmers have completed 94% of the harvest in the 6.2 million hectares dedicated for the crop, reaching 30 MMT of harvested wheat.

Production Rebound will Boost Exports

As a consequence of the production rebound that Ukraine is experiencing on MY 2021/22 for both of the crops, grain exports are expected to increase to 61.5 MMT for the export period that goes from July to June. The increase would represent a 27.3% rise from the 44.7 MMT exported in MY 2020/21. According to the Agrarian Policy and Food Ministry, since the beginning of the current MY, which started on July 1, 2021, Ukraine has exported 16.954 MMT of grains and leguminous crops, which is 2.152 MMT more than the same period last year.

Source: ITC Trade Map

In the case of corn, the USDA projects an increase of 41% to 34 MMT from the previous export season that accounted for 23 MMT, while for wheat, Ukraine is expected to export 23.8 MMT, which would be 41% from the previous season when 16.6 MMT of wheat were exported. The increase in exported volume expected could include 5.2 MMT of barley that are also forecasted, which will add to the other crops to reach the expected 61.5 MMT for overall grains exports.

According to the USDA projections, exports of Ukrainian corn for MY 2021/22 will be mainly directed to the Chinese market, as corn exports to this market in MY 2020/21 grew by 67% from the previous year, despite a 21% decrease of total grain exports that same year. The decline was mainly due to a substantial fall in exports to the EU by 33% over that period. With the corn production recovering and high hopes of more stabilized global prices, Ukraine will boost corn sales to China and will try to recover part of the European market such as Spain and the Netherlands.

Sources: