Ukraine farmers resilient in war’s shadow

CHAMPAIGN, Ill. — Ukraine continues to be a major player in global agricultural markets, despite three years of military attacks by Russia.

Joana Colussi, University of Illinois Department of Agricultural and Consumer Economics instructor, research and learning innovation coordinator, discussed Ukraine’s agricultural resilience in a recent farmdoc video.

Colussi and Iuliia Tetteh, Illinois State University Department of Agriculture associate professor of agribusiness, co-authored a farmdoc daily article on the war’s projections and reality.

Impacts

Preliminary estimates indicate that the war in Ukraine has caused $80 billion in damages and losses to the agricultural sector.

This includes $10 billion in damaged assets, with 57% attributed to machinery and equipment, and $70 billion in losses, largely from lost revenue and increased costs due to the conflict, Colussi and Tetteh wrote.

According to the National Aeronautics and Space Administration, Ukraine has lost between 5 million and 7 million acres of farmland — equivalent to 7.5% of the country’s total cropland — due to occupation, proximity to active combat zones, or contamination with land mines.

After all of the damage and losses to the agribusiness sector, one big question remains — can Ukraine stay relevant in the global agricultural market?

“Ukraine’s economy has been hit hard. It’s gross domestic product is still 22% below 2021 levels, and recovery to pre-war levels could take up to five years, even if the war ended today,” Colussi said.

“Before the conflict, Ukraine was a major player in global agriculture, exporting grains like corn, wheat and vegetable oils to countries across Europe, Asia and Africa.

“But moving forward to the current marketing year, Ukraine’s grain and oilseed production is expected to drop to 74 million tons, 10% lower than the previous year.”

Wheat and Corn

“Ukraine has lost nearly half of its wheat production, primarily due to a decline in acres harvested rather than yields. A significant increase in wheat yields during the last two crop seasons has partially offset the sharp reduction in harvested area compared to pre-war levels,” the researcher continued.

“Corn production has also been affected, though not as badly as wheat. The number of corn acres harvested has dropped, but the impact is less dramatic because corn production is more evenly distributed across the central and northern parts of Ukraine. This contrasts with wheat which is heavily concentrated in areas closer to the conflict zones in the east and south.

“Farmers have also been adjusting to market signals like prices and export opportunities which has helped maintain some stability. Still, lower yields and reduced acreage have kept overall corn production about 20% below pre-war levels.”

Demand

Ukraine has been able to meet both domestic and export demand for wheat so far.

“Domestic use has dropped significantly, by 26%, mainly because of a smaller population and shrinking livestock industry. This decline in local demand has left enough wheat for exports which have remained relatively stable,” Colussi said.

“Corn exports, on the other hand, are projected to fall by 6.6 million tons in the 2024-2025 marketing year compared to the previous year.

“But there’s a bright spot — grain shipments via seaports now make up 80% of all shipments, the highest levels since the war started. This shows that Ukraine’s export logistics are holding up, even in challenging circumstances.”

Big Picture

Ukraine’s share in the global corn market has dropped from 30% in 2018-2019 to an expected 24% in 2024-2025. Its share in the global wheat market has also slipped from 16% to 15%.

“To stay competitive, Ukraine is focusing on securing reliable export routes and exploring new markets,” Colussi said.

“Despite significant challenge, damaged infrastructure, lost farmland and reduced production, Ukraine’s efforts to improve yields, secure export logistics and adapt to market changes have allowed it to remain a player in global corn and wheat markets.”