Agrohub named the most damaging crop of the previous season

11/01/2024 12:21

Logistical difficulties in the agricultural sector led to the situation that companies had to sell the grain harvested in 2022 throughout 2023, while in peacetime the final sale of last year's harvest took place at the most in May. The final sales of the products were completed at the end of 2023.

This is stated in the Agrohub Benchmarking study.

119 field companies with a total land bank of about 2 million hectares took part in the Agrohub study.

EBITDA for the 2022 season for the main crops - in December 2023, after updating prices and storage costs - is $47/ha. The forecast values for EBITDA in February 2023 were $206/ha, when agricultural producers had optimistic expectations for the stable operation of the grain corridor. That is, the actual result is more than 4 times less than expected.

ROWC, the actual rate of return on working capital for growing crops was 4%, while the forecast value at the beginning of the year was 19%.

According to the study, certain crops are unprofitable due to low prices and increased logistics costs, in particular corn (EBITDA — $227/ha, ROWC — 16%). Last year, it occupied the main specific weight in the structure of the crop rotation and, accordingly, a significant volume at the elevators during the entire period of storage and costs for it.

Winter wheat is also unprofitable according to the results of the 2022 season (EBITDA — $19/ha, ROWC — 16%).

At the same time, oil crops remained profitable, in particular, winter rapeseed, which was sold as early as 2022 and did not take additional funds for storage, its EBITDA is $676/ha, ROWC is 61%. In second place is soybeans, $225/ha, ROWC — 27%, and in third place is sunflower, $175/ha, ROWC — 20%.

In 2023, the price of corn decreased the most, by 19% ($187/t — at the beginning of 2023, $152/t — on average for the season), as well as sunflower — by 11% ($448/t and $397/t). Rapeseed and soybean prices did not change significantly, by 2% ($517/t and $505/t) and 1% ($433/t and $427/t), respectively.

Logistical difficulties in the agricultural sector led to the situation that companies had to sell the grain harvested in 2022 throughout 2023, while in peacetime the final sale of last year's harvest took place at the most in May. The final sales of the products were completed at the end of 2023.
This is stated in the Agrohub Benchmarking study.
119 field companies with a total land bank of about 2 million hectares took part in the Agrohub study.
EBITDA for the 2022 season for the main crops - in December 2023, after updating prices and storage costs - is $47/ha. The forecast values for EBITDA in February 2023 were $206/ha, when agricultural producers had optimistic expectations for the stable operation of the grain corridor. That is, the actual result is more than 4 times less than expected.
ROWC, the actual rate of return on working capital for growing crops was 4%, while the forecast value at the beginning of the year was 19%.
According to the study, certain crops are unprofitable due to low prices and increased logistics costs, in particular corn (EBITDA — $227/ha, ROWC — 16%). Last year, it occupied the main specific weight in the structure of the crop rotation and, accordingly, a significant volume at the elevators during the entire period of storage and costs for it.
Winter wheat is also unprofitable according to the results of the 2022 season (EBITDA — $19/ha, ROWC — 16%).
At the same time, oil crops remained profitable, in particular, winter rapeseed, which was sold as early as 2022 and did not take additional funds for storage, its EBITDA is $676/ha, ROWC is 61%. In second place is soybeans, $225/ha, ROWC — 27%, and in third place is sunflower, $175/ha, ROWC — 20%.
In 2023, the price of corn decreased the most, by 19% ($187/t — at the beginning of 2023, $152/t — on average for the season), as well as sunflower — by 11% ($448/t and $397/t). Rapeseed and soybean prices did not change significantly, by 2% ($517/t and $505/t) and 1% ($433/t and $427/t), respectively.
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