Ukrainian farmers are producing more wheat and corn than expected in a war-torn country where seeds and inputs are difficult to come by and swaths of farmland are in occupied territory, but exports are on the decline again as Russia steps up its attacks on Ukraine’s beleaguered port facilities, according to a new analysis by USDA’s Foreign Agricultural Service.
Thanks to good growing weather and the perseverance of Ukrainian farmers, wheat and corn production this year is expected to eclipse last year's production even though farmers had less acreage to plant.
Ukrainian wheat and corn exports are expected to decline 27% for the 2023-24 marketing years, robbing farmers of the incomes they need to provide the agricultural backbone of the country’s economy, while forcing more of the grain into storage, says FAS.
“Following harvest in July, Ukraine has exported 4.8 million tons of wheat so far this [July-June] marketing year, down 500,000 tons from the same period last year,” FAS says in its Grain: World Markets and Trade report. “Most wheat exports are destined for Romania, Spain, or Egypt as Ukraine has limited ability to ship large volumes to sub-Saharan Africa and Asia.”
From July 2022 through this June, the 2022-23 marketing year, Ukraine exported 17 million metric tons of the 22 million tons of wheat it harvested, according to FAS data. The Black Sea Grain Initiative – an improbable deal negotiated by the United Nations, Turkey, Ukraine and Russia – ensured safe passage for ships to load and unload farm commodities at three key Ukrainian ports in Odesa – Chornomorsk, Pivdennyi, and Odesa.
FAS now estimates Ukraine will export just 12 million tons of the 23 million tons of wheat it produced for the 2023-24 marketing year.
There is no Black Sea Grain Initiative after Moscow torpedoed it in July, although Ukraine continued to export via train to the east and through trucks, trains and barges along the Danube River to the Romanian port of Constanta. Obstacles arose on those alternative routes, whether it was opposition by Polish and other governments seeking to prevent Ukrainian grain from flooding their markets or Russian missiles that hit port facilities near the Danube.
All of those difficulties are making it more expensive for Ukraine to export its grains and the country’s farmers are bearing the brunt of that, says Joe Glauber, a senior research fellow at the International Food Policy Research Institute and former USDA chief economist.
“It’s amazing how well it’s gone in one sense, but it’s not good right now for the long-term viability of Ukraine as long as this war is going on,” he told Agri-Pulse.
Ukrainian grain still flowed after the death of the Black Sea Grain Initiative, even though it was moving on a smaller scale. Russia tried to halt even that smaller trade by hitting grain storage and other facilities along the Danube, according to Oleg Kiper, head of the Regional Department of Odesa.
“When civilian ports are targeted, when terrorists deliberately destroy even elevators, this is a threat to everyone on all continents,” Kiper said on his Telegram account.
Russian missiles and drones destroyed port facilities in northern Odesa and on the Danube repeatedly in July and August after the Black Sea Grain Initiative ended, according to Ukrainian government accounts.
“The main goal is port and grain infrastructure in the south of the region,” Kiper said of the missile and drone strikes. “As a result of enemy strikes on one of the Danube ports, warehouses and granaries were damaged.”
It was as if Russia, after pulling out of the Black Sea Grain Initiative, decided it would prevent Ukraine from exporting any grain, even from routes outside the scope of the initiative. Ukrainian Deputy Prime Minister for Reconstruction Oleksandr Kubrakov said in early September that Russian missiles destroyed 26 port facilities such as grain warehouses and damaged five ships in just nine days. Russian missiles destroyed 280,000 tons of stored grain in August, according to the consulting firm APK Inform.
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And then, unexpectedly, activity renewed at the three primary Odesa ports that were key to the Black Sea Grain Initiative. Despite safety concerns, a container ship stuck there since the onset of the war left in mid-August, and then others followed suit.
Ukrainian Deputy Prime Minister for Reconstruction Oleksandr KubrakovThat initiated what Ukrainian officials began calling the “Ukrainian Corridor” as ships resumed carrying grain out of Chornomorsk, Pivdennyi and Odesa despite the uncertainty over the contested waters of the Black Sea.
Kubrakov said in a post on X last week: “Vessel traffic continues both to and from the ports of Big Odesa. Six vessels with 231,000 tons of agricultural products on board have left the ports of Big Odesa and are heading towards the Bosphorus [Strait]. Five vessels are waiting to enter ports for loading. Traffic along the Ukrainian Corridor continued despite Russia's systematic attacks on port infrastructure. Since August 8, 2023, 91 vessels have exported 3.3 million tons of agricultural and metal products, and 116 vessels have called at the ports of Odesa, Chornomorsk, and Pivdennyi.”
But the Russian bombing campaigns last week aimed at the main Odesa ports sent shockwaves through the Ukrainian ag sector and the United Nations after significant infrastructure damage and the death of a civilian on a merchant ship at the Port of Pivdennyi.
“The consequences of this brutal and relentless pattern of Russian attacks on port facilities are devastating for Ukraine's economy and the hundreds of millions of people facing hunger worldwide,” UN Humanitarian Coordinator Denise Brown said of the Nov. 8 attack that took place as U.S. Transportation Secretary Pete Buttigieg was visiting Ukraine.
But if Moscow believed the attacks would halt this new “Ukrainian Corridor” that is supported by the Ukrainian Navy, it was wrong, Ukraine says.
The Ukrainian Ministry of Restoration said in a public statement the day after the attack that the "movement of vessels through the 'Ukrainian corridor' did not stop, despite the systematic attacks of the Russian Federation on the port infrastructure."
On Nov. 9, as emergency crews were still cleaning up the attack from the day before, six more ships carrying 231,000 tons of ag commodities departed Odesa ports, and five were waiting to take on freight.
FAS raised its forecast for Ukrainian wheat and corn because of the activity in Ukrainian Corridor – sometimes called the “Humanitarian Corridor” – but stressed that shipments will still fall well below trade under the Black Sea Grain Initiative.
"For both wheat and corn, export forecasts have not increased commensurately with forecasts for domestic production,” FAS says in the Grain: World Markets and Trade report. “As was the case in the post-invasion months of 2021-22, the lack of substantive exports via the Black Sea for Ukraine is expected to result in the accumulation of substantial ending stocks.”
If the export situation for Ukraine doesn’t improve, the country is going to be a smaller player on the world ag stage, said Glauber. And that means other countries are going to have to replace Ukrainian production.
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