The news flow from south Russia is decidedly negative. A combination of frost and drought has dropped Russian grain production potential for 2024. However, just to the west of south Russia, Ukraine has its own problems that will likely reduce production potential year on year.
The war wages on and will hurt Ukraine’s production potential for 2024. Ukraine and its farmers have been very resilient but after 2+ years of war and a third agricultural production cycle, there is expected to be a reduction in seeded acreage. Labour is becoming harder to maintain and logistical challenges remain elevated.
The Ukrainian Grain Union updated their estimates for 2024 production. The organization estimates 2024 wheat production at 19.1 million tonnes, down from 22 million tonnes in 2023. Exports are forecast to drop from 16 million tonnes in 2023-24 to 13 million tonnes in 2024-25.
2024 rapeseed production is estimated at 4.3 million tonnes, unchanged from 2023. However, they estimate exports for 2024-25 at 3.4 million tonnes, down 200,000 tonnes from 2023-24. Both rapeseed and wheat are predominantly winter crops, seeded in the fall and harvested in the summer. As such, while ongoing weather will have an impact on final yield, there is less time for a recovery.
The feed grain situation is also due to a drop in production in 2024. Corn is a spring-planted crop and a portion of barley is as well. A smaller corn seeded area is the driving force behind a reduction in overall corn potential. Moreover, the Ukrainian Grain Union says that rain is needed to preserve corn potential. As it stands today, they are estimating 2024 corn production at 25.5 million tonnes versus 29.6 million tonnes in 2023. Exports are forecast at 20.5 million tonnes for 2024-25, down from 26 million tonnes in 2023-24.
Ukraine’s barley production is estimated by the Ukrainian Grain Union at 4.5 million tonnes for 2024, down from 5.8 million tonnes produced in 2023. Exports are forecast at 2 million tonnes for 2024-25, down from 2.5 million tonnes in 2023-24.
Overall, Ukraine will export 9.2 million tonnes less in 2024-25 than they did in 2023-24 of the four crops mentioned above. This will hurt farmers’ bottom lines as less grain means less revenue. Ukraine which has been successful at maintaining its own Black Sea Export Corridor will also have less of a collective return from export activity.
Meanwhile, the loss of Ukrainian exportable surplus will need to be made up by other exporting countries.
