Ukraine claims its position as one of the leading agricultural countries in the world.

The country possesses 30 % of world’s black soil – the most favorable soil for agriculture. This allows for a certain commercial advantage. Ukraine has been gaining a stronger position on world’s agricultural market over the recent years.

In 2011, Ukraine harvested the highest grain crop in twenty years (since declaring independence). The unprecedented 55mn tones of grain – as well as the removal of the export taxes and quotas, contributed to export boost in 2011. This resulted in Ukraine becoming one of the world’s top three grain exporters. The country also ranks number one in barley exports globally. Moreover, this year Ukraine became the third corn supplier in the world, surpassing Brazil and being the second runner-up to the USA and Argentina.

In 2011, the agricultural production increased by 17.5% y/y, reported the State Statistics Service. The highest growth was seen in the north eastern Ukraine (Kharkov, Poltava, and Sumy regions). Interestingly, both agricultural firms and households experienced production growth of 23.8% and 12.3%, respectively.

In 2011 each region of Ukraine boosted agricultural production while in 2010 overall agricultural production in the country dropped by 1.5 %. In 2011, the agricultural profit rose by 52.3% y/y to UAH 19.8bn (USD 2.5bn), the State Statistics Service has reported. The profit margin edged up to 25.8% from 20.7% in the previous year. Some 79% of farmers ended the year in the black, while 21% saw losses.

In vegetal production, companies reported profit of UAH 17bn, with a profit margin of 31.8%. The production of milk and eggs remained also profitable. The profit margins doubled from 18.6% to 37% for the eggs producers while dairies’ margins inched up from 17.9% to 18.4%. On the opposite, the poultry farms deepened in losses area with the negative margin rising from 4.4% in 2010 to 13.4% in 2011. In 2011, profit margins of meat cattle farms decreased to minus 25.1% against minus 35.9% in 2010, of meat swine farms to minus 3.9% against minus 7.8%, wool production to minus 71.7% against 82.2%. At the same time, it became even more unprofitable to grow sheep and goats for meat (minus 41.1% against minus 29.5%).