As for me and my house we will serve the Lord....

Sunday, September 20, 2015

Farming and the economic outlook in Ukraine

This post is for all our farmer (and farm business) readers out there. I find out we have more of you every winter when we are home in Manitoba at the dairy conference. Everyone asks how the farming in Ukraine is, so here is the scoop on this year. The price of milk is the same as last summer's price (keep reading to find out why that's not good). Summer is when the price is the lowest for milk (eggs too) because there are so many villagers who have excess milk from their one or two cows and sell it in the summer when there is lots of grass for the cows to eat, and more milk in the market means lower prices ( this summer there was was timely rain which made good grazing in the village pastures and lots of milk, until August, anyway.) The price is market driven, as in what it sells for at the markets (or bazaars) in the city, generally in empty pop or water bottles.

That's fresh and unpasteurized, Ukrainians wouldn't have it any other way, they want to make their own cottage cheese at home and other products. Although not all milk is as high quality as ours, since not much milk goes into a refrigerated bulk tank, and some sellers are said to water it down at some point in the chain. which is why all the talk of selling milk to the EU is hard to believe,  Traditionally the biggest market for Ukrainian milk was Russia, and that has been gone since they closed the borders to Ukrainian milk when the war began last year.

 Right now the price is just rising to eight grivna a liter in the markets, but it has been less all summer, so the people who drive here in the their cars and buy it from us to sell in the market pay us four grivna a liter (some of them get behind on payment when times are tough, so we have some IOUs that will get paid, when they start turning a profit). Any excess milk (mostly in the summertime) is sold once a week to a milk truck for three and half, to get the tank empty so we can wash it. We empty it a couple times a week, so the milk we are selling stays fresh.

The herd itself is looking better all the time, we have been calving out 50% Holsteins and even some nice looking 75% Holstein heifers over the last year. These heifers give much more milk than our russian-red cows we started with five years ago.
We hope to move the milk cows into the freestall barn in the next month, as soon as the parlor is ready (it needs to be assembled, now that the electricity is finally flowing into the transformer. They are coming to hook the barn to it Monday, the transformer had to "warm up" over the weekend.) Right now, they switch the cows in the stalls and the ones in the pen in the side at every milking, three times a day.

our transformer (they guys dug a trench for the cable Friday)

Economically everyone in the country is finding it hard to make ends meet, which is another reason for the low price of milk, people have less money to buy it. Everything has generally doubled in price, and imported stuff has skyrocketed. Last year the grivna tanked against other currencies, and although it has stabilized this summer to around 22 to a US dollar, (for years it was 8:1). It has really hurt regular people, fuel prices have doubled, and clothing, food, medicine but salaries and pensions have remained the same, and many people have lost their jobs due to the economy. Not to mention that electricity and gas prices are more than doubling, partly due to the loans Ukraine got, which demanded market driven pricing. Most houses in the village are heated by natural gas, but last winter when prices went up the first time,  some people were burning wood to stay warm (some got cut off by the gas company, literally the cut the pipe to the house). There may not be many trees left next spring.

So this year we do not anticipate making a profit from the dairy end of the business. We pay three ladies to milk the cows, plus the students.  Last year milk sales covered a lot of the expenses of running the school, but student salaries are about 27,000 grivna a month this year, since there are twice as many students. Then there are salaries for the group home parents and Maria too.

However, the good news is that for the first year we had a good crop of... everything in the fields because of the rain. Four good cuttings of hay! (two is as much as we have made other years here). On Thursday they baled the fourth cut on the field that was seeded last year; and it was beautiful alfalfa, over Garry's knees. The hay mow is full to the top, there are some round bales at the new farm, and high pyramids of straw outside both barns. Not only do we have lots of feed for the cows, there is grain to sell to cover the expenses of buying fuel for the tractors (at twice last year's price) and fertilizer (three times as expensive) for next year's crops.

They hope to get 50 hectares planted into winter wheat this fall; as soon as some rain falls, the ground is too hard to plow right now. Some of it will be planted where the sunflowers were grown this year. Yesterday the combine harvested the first sunflower field, they tried earlier in the week, but it had rained a little Monday and it was too wet Tuesday. Max thinks that they did three ton a hectare, and they took the truck right to Dnepropetroesk to the crushing plant to sell. (turns out it's 2.3 but still really good!)They hope the other field will be ready to combine next week.

The corn crop looks unbelievable and is drying down nicely now. They didn't have to harvest many acres for silage to get more than last year in the bunker, and it looked yellow because of all the corn kernels in it. I was teasing Garry it looked like real silage this year. Most years he starts chopping it because the plants are dying instead of ready.

 In a couple weeks they should combining the corn for grain to sell. They plan to feed more wheat than corn and sell corn and sunflowers, except what they owe for rents (there are 37 people who take crops and goods instead of cash for rent, they get 150 kilos of sunflower seeds, among other things) This year are feeding three times as much hay as other years and only buying a little brewers grain. Other years they have traded sunflowers for mucoka (the stuff that is left after they press the seeds for oil) to use as a protein supplement, but there is so much good alfalfa hay for the cows' protein needs, they won't need to this year.

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