Expenses of farmers per hectare of agricultural land in 2023 are expected to reach about 27 thousand UAH

The costs of Ukrainian farmers per hectare of agricultural land in 2023 are expected to be about 27 thousand UAH, which is an increase of 1.9 thousand UAH or 7.6% compared to 2021 before the war, when the costs amounted to 25.1 thousand UAH per hectare. This was announced by Oleksandr Zakharchuk, Head of the Department of the National Research Center "Institute of Agrarian Economics", during the analysis of the results of a study of farms in Vinnytsia and Cherkasy regions conducted by scientists.

This increase in production costs is due to a reduction in mineral fertilizer application from 4-5 centners per hectare to 2-2.5 centners, as well as a reduction in main and auxiliary workers and wages. In addition, the simplification of technology has led to a reduction in the amount of fuel and lubricants, which has also affected yields.

In 2023, the main share of production costs will be made up of material expenses, in particular

mineral fertilizers - UAH 7.1 thousand or 26.4% of total costs;
fuel and lubricants - UAH 3.2 thousand or 12%;
plant protection products and seeds - UAH 2.1 thousand or 7.7%.
More than 1/6 of the expenses are for maintenance of fixed assets, current repairs and maintenance, which amounted to UAH 4.1 thousand or 15.2%, of which 11.9% are depreciation charges.

Settlements with shareholders and land lease payments amounted to UAH 3.3 thousand or 12.2% of production costs. In addition, labor costs amounted to UAH 1.9 thousand or 7.1%, and taxes - another UAH 1.6 thousand or 6%.

Taking into account these costs, scientists of the Institute of Agrarian Economics calculated the break-even points of yields for different crops in 2023:

winter wheat - 60 centners per hectare at a market price of UAH 4,500 per ton;
corn for grain - 67.5 centners per hectare at a price of UAH 4,000 per ton;
sunflower - 27 centners per hectare at UAH 10,000 per ton.
Given the lower yields of these crops and the costs of growing them, farmers may suffer losses.