U.S. prepares for increased competition from Ukraine

by World Grain Staff
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WASHINGTON, D.C., U.S. — State corn checkoff executives recently traveled to Ukraine to assess its production potential, trade opportunities and market competitiveness, the U.S. Grains Council said on Oct. 14.

Iowa Corn Promotion Board Chief Executive Officer Craig Floss participated in the U.S. Grains Council’s State Executives Mission and said he was most surprised by the significant progress Ukrainians are making in areas of their agricultural development.

"Specifically, Ukrainian farmers are coming out of the old collective farm system and some very large producers who have been able to put together a lot of small leaf holders to create 200,000 plus hectare operations. These operations are bringing in a lot of western technology, good agronomic practices, machinery, seeds, the chemical fertilizer components and they’re actually able to significantly increase their per hectare yield," Floss said.

According to Floss, Ukrainians making those yield improvements without the use of biotechnology.

"They have a significant opportunity to improve their yields just by utilizing standard hybrid technology, improving their agronomic practices and using proper fertilization," Floss said.

Once they’ve reached that level, Floss said biotechnology will be a good tool for Ukrainian producers. But that won’t happen overnight.

The same is true, Floss said, for Ukraine becoming a competitor of the United States in the global grain market. He said the state corn checkoff executives met with high level government officials, including the Minister of Agriculture, and learned there are significant roadblocks to overcome before Ukrainians are able to compete. According to Floss, government intervention causes turmoil for in-country production and export decisions, which will hold them back.

Still, Floss said it is important for the council to continue demand and relationship building efforts overseas; particularly those areas in close proximity to Ukraine.

"U.S. corn farmers, working through the council, have worked very hard in the Mediterranean regions, specifically in Egypt in helping develop a meat market using water buffalo and in Morocco with the poultry industry," Floss said. "We have very solid relationships up and down the value chain in these two countries. Those relationships will helps us later as we try to maintain a competitive advantage of quality and of reliability."

Just as those council activities are important, Floss said trips like this one are vital.

"It’s important for the council and ultimately for the U.S. corn producer to understand the customers that want our product and to build those markets," Floss said. "Just as importantly, it’s necessary for us to go and assess our competition so that we know what we need to be doing pro actively today to head off potential degradation of those markets down the road. A trip like this to Ukraine for us to get a good understanding of where they are and the potential timing of when they could be an increased threat."

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