Some consider it the largest, discounting areas of Russia as being part of Europe or calculating a lower area for France. Seeing the images of war on the news caused me to think about what impact might be felt by the agriculture industry there and what that might mean for Europe and other areas of the globe.
Seventy percent (102.5 million acres) of Ukraine is covered by agricultural land. It is often referred to, as is our Midwest, as a “breadbasket,” responsible for 12%-19% of global exports of wheat, corn, barley and rapeseed. Compare Ukraine at 16% to the U.S. at 38% of world corn exports — Ukraine’s output and exports are impressive.
Right now, it is expected there may be serious disruptions in spring planting, although the Ukrainian farmers say they will do all they can to get crops in on time or close to it.
President Volodymyr Zelenskyy is urging farmers to plant crops, but many are forced to flee the country or they are fearful for their workers due to war activity near their homes. The United Nations predicts that up to 30% of Ukraine’s crops may not be planted.
Where does the dairy industry fit into Ukraine’s agricultural economy? And what about the war?
As in the U.S., the majority of dairy farms in Ukraine are family-owned, with industrial farms accounting for only about 30% of the total. Some adverse climate conditions caused a decline in production for 2020, but production has remained steady since then with very slight decreases. Also, as in the U.S., Ukraine has a valuable and strong cheese manufacturing sector.
Ukraine exports whole milk and cream, butter, condensed milk, skim powder and whey to Europe, Asia and the Middle East. There were declines in dairy exports during 2021, seen by the government as a result of the pandemic and disruptions in supply lines.
Since dairy is the second-largest sector of agriculture in Ukraine (after crops), there has been a high level of investment in modernization of farm operations, which is predicted to stabilize the industry and increase production for exports.
The current war may change all of that, however.
Agri-View recently told the story of a dairy farmer who left his large farm — he has two Ukrainian business partners — to go home to the Netherlands. His operation milked 2,000 cows per day and he said, “The last I heard, the trucks were still picking up the milk.”
One has to wonder how long that will last. I also have to ask what will happen to the cows if the other owners have to abandon the farm.
Other dairy farmers operating in relatively “quiet” areas of the country are facing increased costs for feed, fuel and other supplies. Some are resorting to an unplanned cull of their herds, resulting from higher prices for those cows over what can be earned from milking.
As one farmer said in a report published in The Times, “I am culling my herd because the price of culled cows has gone through the roof as there is a shortage of cows for McDonald’s and those sort of places.”
Recently published economic reports by King Consulting in the United Kingdom state that all dairy exports from Ukraine are likely to cease, which will cause a tremendous commodity shortage throughout Europe.
It is expected that global dairy prices will rise due to loss of both Ukrainian and Belarusian exports, which may also trigger increased production in other areas of the world.
None of us can imagine the disruptions faced by Ukraine’s dairy farmers. The tragedy makes our internal (to Pennsylvania’s dairy industry) struggles and squabbles very small in comparison. Perhaps we can use this moment for good by making serious commitments to working together to resolve issues we face. We have started down that path, but perhaps we can try harder. I’m willing.
The Pennsylvania Milk Marketing Board is always available to respond to questions and concerns. I can be reached at 717-210-8244 or by email at chardbarge@pa.gov.
