WASHINGTON (USDA) – USDA’s forecast for Ukrainian corn and wheat production may be a little surprising, given the current political climate there.
As political tensions and skirmishes persist in Ukraine, it may appear agricultural production is caught in the crossfire.
Not exactly, according to USDA Foreign Agricultural Service Analyst Mark Linderman. He visited Ukraine last month, and while that country’s current crisis has caused its currency to plummet by 40 percent since January, Linderman says Ukrainian farmers are working around the higher cost of inputs this year.
“The farmers will be compensating for these high prices in a variety of ways,” says Linderman. “One would just be to perhaps reduce the application rates of mineral fertilizer, for example. They could purchase cheaper materials; chemicals, for example. Maybe buy chemical from China, rather than Europe. So the quality will be lower, but the price would be lower as well. They could apply materials to selected fields; they could focus on the potentially more profitable crops, and cut back on other fields like spring barley, for example, which is one of the less profitable crops. So farmers are very shrewd over there, very clever, and will do what they can. They wouldn’t be able to entirely offset the price increases, but certainly there are ways they could do it to counteract the high prices.”
Linderman says corn planting in Ukraine is progressing well, though USDA’s production forecast for the 2014/2015 marketing year at 26 million metric tons is almost 5 million metric tons lower than last year’s record harvest.
On wheat, the production figure is only 2 million metric tons lower; about average, according to Linderman.
“Wheat production for 2014 is forecast at 20 million metric tons,” says Linderman. “Last year was 22.3 million metric tons. So, there was a slight drop in area, planted area, from last year, but once again the wheat area was planted in the fall. It’s mostly winter wheat, so the drop in area had nothing to do with the current difficulties, it was just a reduction in planted area. Our yield forecast is about average, actually. It’s lower than last year, but it’s about average. Conditions so far for winter crops have been outstanding, as indicated by both interviews that I had in Kiev and also satellite imagery we use to monitor crop conditions, in this case very good conditions, through the 8th of May.”
When it comes to the final yield numbers this year, political upheaval is unlikely to be the top influencing factor.
“Weather is still, by far, the largest yield determinant,” says Linderman.
Gary Crawford with USDA contributed to this story.
To hear more on planting progress in Ukraine, click here.