Who grows soybean in Ukraine?

During the last 10 years we can observe that production in Ukraine is growing. Today Ukraine is the 8th world's producer and 6th world exporterof soybean.

In Ukraine, in the year 2017, 3.3 million tons of soybeans were produced at an area of 1.7 million hectares according to the latest data of the Ministry of Agrarian Policy and Food of Ukraine (November, 1). And experts from the ministry predict that future production will increase to 3.8 million tons next year. 2.4 million tons were exported last 11 months and the main commercial partners were Turkey, Iran and Egypt.

The Ukrainian agrarian confederation researched the technical potential and production efficiency of soybean in 8500 enterprises in Ukraine, depending on the size of the enterprise. All enterprises were divided into the following areas: І - to 100 hа, ІІ - 100-200 hа, ІІІ - 200-1000 hа, ІV - 1000-5000 hа, V - 5000-10 000 hа, and VІ - more than 10 000 ha.

Actually, the most popular production of soybean observed among the largest enterprises with an area of more than 10,000 ha. About 66% of them grow up soybean.

But the share in the structure of crops in the largest enterprises is only 8.8% and approximately 10% in enterprises with area less than 1000 ha. Actually, enterprises traditionally sow wheat, corn and sunflowers and the share in the structure of these crops varies from 12 to 26%. And soybean is one of the best precursors in crop rotation.

 

We researched yield as an indicator of technical efficiency and potential. In 2016 years the largest enterprises had the best yield of soybean. It shows that agriholdings (the largest enterprises) use high yielded sorts and better technologies.

 

But if we talk about profitability, we can see that enterprises with area from 200 to 5000 ha are more profitable then agriholdings. Profitability of production is decreasing after point of 5000 ha.

 

When we researched profitability we used two indicators – the size of the profit and the cost of production of soybean.

 

Actually, cost of production in 1-2 groups is less than in the 6-th group. The highest cost has the 5-th group with area of 5000-10000 ha. When small business has less cost due to cheaper material and technical means, the largest enterprises use more expensive materials for better yield.

 

Thus, we can see that profit at 1 center in the largest enterprises is not very different from small enterprises. But for small business soybean is the final product. And for the largest enterprises the final products are soybean oil, soybean meal, ect. For them, soybean is partly raw material. Enterprises transfer it into their processing capacity by internal price. Other part of produced soybean is exported or used as forage. In the end, it reduces profits and profitability of soybean production. 

Another problem is the location of production in different economic and natural regions of Ukraine. The largest enterprises have different soil quality, weather and marketing costs.

Actually each enterprise tries to actaccording toits own potential and production facilities. As for me, when we talk about soybean, the most effective are enterprises with area from 200 to 5000 ha. According to the researchif enterprises have area to 200 ha and more than 5000 ha, they are less effective.  

 

Onyshchenko Nelia, analytical department of UAC