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Maryland Farm Boy Now CEO Of 276,752 Acre Farm In Ukraine
John Shmorhun CEO of AgroGeneration S.a.
Photo by John LaRose
Ukraine May Become World’s Largest Grain Exporter In 10 To 15 Years
10th of a 10 Part Series
JOHN M. LAROSE
BETTY VALLE GEGG-NAEGER
MidAmerica Farmer Grower
KYIV, UKRAINE
During the recent USDA Trade Mission to Ukraine, led by USDA Deputy Secretary Michael Scuse, MidAmerica Farmer Grower did a short interview with John Shmorhun in Kyiv. Born in Rochester, N.Y., raised on a farm in Maryland, Shmorhun is CEO of AgroGeneration S.a, a publicly traded company on the New York Stock Exchange with operations in Ukraine. Shmorhun presently lives in Ukraine and manages the farming operation.
AgroGeneration is an 112,000 hectare (276,752 acres) grain and oilseeds operation in Ukraine. AgroGeneration has average 10-year farm lease agreements with private leaseholders. Shmorhun utilizes 1,400 employees to operate the farm. Strategically, the company plans to increase its size.
Best management practices are used throughout the operation. Ukraine Government regulations and key investors such as EBRD and OPIC require that Shmorhun file environmental and safety reports.
On non-irrigated land Shmorhun uses Horscht, Vanderstadt, Kinze and John Deere planting equipment and CR980 New Holland Combines with 40 ft. headers. Major crops are winter wheat, winter and malted barley, sunflower, rapeseed, corn, soybean and peas and chickpeas.
“Ukraine is presently third in worldwide agricultural grain exports. Currently Ukraine produces somewhere around 60 million tons of grains, all grains,” said Shmorhun. “Its internal demand is somewhere around 25 million metric (MT) tons and it doesn’t change very much. Therefore approximately 35 million MT tons of grains are exported every year.”
Considering the sunflower oil, which is included in the 30 million tons exported, brings the claim into perspective. “So yeah, after the United States and the European Union, Ukraine is the third largest grain exporter in the world,” Shmorhun stated.
“Brazil is also a big producer, however they use a lot of their own production. And rice production has to be considered with grain.
China is a huge producer of rice, corn and soybeans, but China consumes everything they produce.”
“However, as production grows in Ukraine, and it’s expected that in the next 10-15 years the country will be producing around 80 or 90 million MT tons. The internal demand will probably not change so the difference will go to export.”
Shmorhun said Ukraine can increase production. “Ukraine is potentially a 70, 80, 90 million MT ton grain exporter in the world, which could put it in the number one position ahead of the United States as an exporter. The United States’ ability to grow more is limited. You had your GMO kicker, you’ve done all you can do, and the land is all taken.”
“While some yields in Ukraine presently are under U.S. yields, that’s not true in everything. Presently they can’t compete because the U.S. farmer uses GMO seeds. But eventually Ukraine may switch to GMO seeds. If Ukraine farmers would shift to GMO, just that kicker alone will put Ukraine in competition with the United States in terms of productivity, but we (Ukraine) already produce better quality, better yield of wheat and barley than the United States does, and our sunflower production is number one in the world.” Shmorhun stated.
Space and efficiency will boost output. “Ukraine has 32 million hectares of arable land, of which only 27 million is actually being operated today. That’s 5 million additional hectares that could be brought into production, plus on top of that, a lot of the farmers and the cooperatives do not operate the current land effectively,” he explained.
“Today if I take a hectare of land that produces 1-1/2 MT tons of wheat, I can convert that because of the quality of the soil, the weather, and technology to 3 to 4 MT tons in a matter of a year,” Shmorhun said. “I can double it. So the ability of Ukraine to increase its productivity is completely evident. It is very obvious that they can do it.”
“Presently Ukraine grain exports is number three, but could be number two or number one in the next 10 to 15 years. There’s plenty of land that can be operated and expanded.” Summed Shmorhun.
“Ukrainian land owned/leased by large agri-companies consists of about 6 million hectares, 19 million hectares are small farms and collectives that are less than 30,000 hectares in size, so he reasoned that if 15 million farmers in Ukraine are not effective now, whatever additional productivity increase is going to reflect on the export numbers,” concludes Shmorhun. ∆
JOHN M. LAROSE: Publisher MidAmerica Farmer Grower
BETTY VALLE GEGG-NAEGER: Senior Staff Writer, MidAmerica Farmer Grower
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