Modeling the impact of mineral fertilizer costs on effectiveness of production and export corn from Ukraine

Purpose. The goal of the study is to evaluate the current status and model the influence of changes in the cost of mineral fertilizers on the effectiveness of corn production and export from Ukraine in probable scenarios using the econometric model of partial equilibrium AGMEMOD (Agricultural Member State Modeling), which creates the preconditions for improving the efficiency of decision-making and implementation of it and contributes to achieving the goals of state agricultural policy. Methodology / approach. In the course of research the following methods were used: monographic – at detailing modern level of efficiency of functioning corn grain production; abstract-logical – to formulate conclusions; comparative analysis and expert assessments – for the analysis of quantitative and qualitative indicators of development of the domestic corn market; tabular – for a visual representation of the results of the study; statistical and economic – for the collection and processing of statistical data, the study of the dynamics of exports and imports of grain; factor analysis – to determine the factors influencing the efficiency of corn production; economic and mathematical modeling – to assess the impact of changes in the cost of mineral fertilizers on the effectiveness of corn production and export from Ukraine, it was used econometric dynamic model of partial market equilibrium – AGMEMOD. Results. It is evaluated the current status and defined the main factors, which influence on the formation of the supply and demand in corn market. It was analyzed the effectiveness of corn production in terms of regions of Ukraine and dynamic of Corn Balance in Ukraine. It was determined the volumes, prices and revenues from grain export in general and corn export in particular in Ukraine in the period from 2010 till 2020. We modeled the consequences of the impact of changes in the cost of mineral fertilizers on the effectiveness of corn production and export from Ukraine according to probable scenarios using the econometric model of partial equilibrium AGMEMOD. According to the results of the study, in terms of probable scenarios of increasing the cost of mineral fertilizers, its impact on the level of yield, harvested area, volume of corn exports from Ukraine is quantitatively substantiated. It is proven that the high yield of corn and the favorable current price situation for grain will ensure a sufficient level of profitability of this commodity. However, the radical increase in the cost of mineral fertilizers threatens the competitiveness of Ukrainian corn in domestic and foreign markets, which will eventually lead to higher food prices, deteriorating food security, as well as reducing the export potential of the grain industry. To ensure profitability at the level of previous years, agricultural producers will be forced to reconsider technological operations, deliberately reducing productivity per hectare in favor of economic efficiency. It is substantiated that lowering the rates of mineral fertilizers from the technological need for growing corn will increase the dependence of the crop on weather conditions and contribute to the deterioration of grain quality. All this will ultimately negatively affect the gross harvest and export potential of the grain industry. The directions of improvement of the mechanism of reduction in price or compensation of expenses for purchase of mineral fertilizers for domestic commodity producers are offered. Originality / scientific novelty. Using the econometric model of partial equilibrium AGMEMOD, the consequences of the impact on probable scenarios of growth of mineral fertilizers on yield, harvested area, volume of corn exports from Ukraine are substantiated, which creates preconditions for improving management domestic grain in domestic and foreign market segments. Practical value / implications. Public and sectoral authorities can use the proposed methodological approaches and research results in developing priority areas for improving the effectiveness of the domestic grain industry.