Ukraine Grain Harvest Begins, Farmers Running Out of Storage Options

Bloomberg writers Megan Durisin and Volodymyr Verbyany reported on Friday that, “From a dramatic loss of export revenue to mine-riddled fields and exploding machinery, Russia’s invasion has taken a massive toll on Ukraine’s agriculture sector. Now, with ports remaining closed despite international efforts to reach a deal, harvests are getting underway with silos still loaded with last year’s crops.

“Farmers are searching for alternatives to store the growing stockpiles while already worrying about how much they’ll be able to plant for the 2023 season.

That means Ukraine’s ability to supply the world with much-needed grain may be limited even once ports reopen — production is already expected to be sharply lower this year.

“Grain quality and yields would also suffer if crops are left longer in fields because of a lack of storage.”

Durisin and Verbyany added that, “Ukraine’s government expects grain production to fall about 40% versus 2021, after farmers lacked fertilizer or left land unsown. Even so, it’s carrying a backlog of 20 million tons into the season that starts next month.

“A fifth of its grain elevators have also been damaged or lost to territory occupied by Russian forces, according to Ukraine’s agriculture minister. That could leave farmers short of 10 to 15 million tons of storage by October.”

And yesterday, Wall Street Journal writers Alistair MacDonald and Thomas Grove reported that, “As Ukrainian farmers struggle to export grains and seeds from last year’s harvest, they are running out of space to store this year’s.

“With Ukraine’s Black Sea ports cut off by the war with Russia, Ukraine has found it hard to export much of its massive grain and seed production. Officials project they will be able to ship out around one-third of what they usually do.

“Because of the bottleneck, millions of metric tons of grain, soybean and oilseed are currently still in warehouses and silos that should be empty by now in anticipation of the new harvest, which has already begun and moves into high gear during the next month. The Ukrainian government estimates farmers need space for an additional 10 to 15 million tons of grain. That is equivalent to about 24% of this year’s expected crop.”

The Journal article noted that, “U.S. President Biden said last week that the U.S. will build temporary silos on Poland’s border with Ukraine. Poland’s minister of agriculture said that such a project, if details could be worked out, would take three to four months to complete. That time line would miss much of this season’s harvest.”

Reuters writer Michelle Nichols reported last week that, “Temporary silos on Ukraine’s border would be intended to prevent Russia from stealing Ukrainian grain and make sure the country’s winter harvest is not lost due to a lack of storage, U.S. Agriculture Secretary Tom Vilsack said on Thursday.

“But, during a visit to the United Nations, Vilsack stressed that reviving shipments from Ukraine’s Black Sea ports was the most effective and efficient way to export grain and urged Russia to take U.N.-led talks on the issue ‘seriously.'”

Meanwhile, Reuters writer Pavel Polityuk reported last week that, “Ukraine’s June 1-16 grain exports were down by around 43.5% from a year earlier to 695,000 tonnes, agriculture ministry data showed on Friday.”

Reuters writer John Irish reported last week that, “France’s president said on Friday he saw little chance of an agreement with Russia for now to get grain out the Ukrainian port of Odesa, but said there were talks to regenerate rail routes linking Odesa to the Danube in Romania as an alternative.”

And Claire Parker reported in Friday’s Washington Post that, “The war in Ukraine could push up the number of people facing acute food insecurity by 47 million this year, according to the United Nations.

“Some places are already feeling the effects of the grain crisis,” the Post article said, and went on to provide details regarding Nigeria, Somalia, Ethiopia, Egypt, and Yemen.

Elsewhere, Alistair MacDonald and Thomas Grove reported on the front page of Saturday’s Wall Street Journal that, “Last month, an armed group turned up at Dmitry Skorniakov’s farm close to Mariupol and told workers that the land was being ‘nationalized’ and now belonged to them.

“Moscow’s invasion of Ukraine has captured some of the most productive agricultural land in what is one of the world’s great breadbaskets, disrupting supplies and pushing up food prices. Russian forces have also stolen grain and equipment, the Ukrainian government and farmers say. Now, entire farms are being taken, some farmers say.

“That allegation of land theft is becoming increasingly common in parts of Ukraine occupied by Russian forces, heaping more misery upon the country’s beleaguered farming industry and threatening to crimp harvests when the world needs Ukrainian crops.”

The Journal article noted that, “Overall, the Ukrainian government has accused Russia of stealing around 400,000 metric tons of grains and seeds. Ukraine has also accused Russia of deliberately trying to hurt its farming sector, which generated about 22% of the country’s gross domestic product last year, according to United Nations data.”