The recent destruction of the fresh logistics infrastructure in Ukraine created new challenges for greenhouse producers. Products must be delivered directly to stores, which significantly impacts profit margins. Switching to other vegetable crops requires substantial investment and is not always economically viable, forcing some companies to cut production volumes.
Greenhouse Farming: The Strain of Power Outages
Greenhouse vegetable producers have faced additional difficulties this year. The coldest winter in 10–12 years drove up energy consumption by 50%, while electricity costs rose by more than 50% compared to the previous winter season. At the same time, the purchasing power of Ukrainians is declining, the population has decreased, and logistics are becoming increasingly complex and expensive.
To avoid losing market share and customers, Galicia Greenery—a producer using hydroponic technology—made the deliberate decision to operate at a loss during the winter season. The company’s greenhouse complex is located in the Lviv region.
See also Resilient energy efficient agriculture and food supply for Ukraine | Project Database CMS
Beeld: © #UAgroNL
Even before the war and the rise in electricity prices, winter production of crops like lettuce was not always profitable; however, there was previously an opportunity to recoup losses during the spring season. This year, however, we required financial assistance from shareholders.
The enterprise grows leaf lettuce varieties—Lollo Bionda, Lollo Rossa, and Frisée, as well as some Romaine—and produces lettuce mixes.
"Lettuce is not as popular in Ukraine; only about 10% of the population consumes it regularly, and Iceberg dominates the product range. In Poland, for instance, butterhead lettuce is very popular, with sales volumes comparable to those of Iceberg," the producer explained.
Domestic Iceberg lettuce is unavailable on the market during the winter. It is imported from Spain and Italy, creating price pressure on Ukrainian produce. In the summer, open-field produce enters the market, which also affects pricing.
Energy costs account for 40–50% of the production cost for greenhouse crops, reaching as high as 70% for older, energy-inefficient facilities. This is precisely why older greenhouses began closing following the start of the full-scale invasion. Furthermore, emergency power outages lead to increased plant disease and reduced harvest volumes.
Next Year Could Be Worse
Logistical challenges are currently the main focus for Galicia Greenery. After Russia destroyed most of the retail chains' distribution centers, the company has been receiving requests from them for direct deliveries to their stores.
"We are trying to reach the nearest regional centers, but it is difficult to cover rising transport costs—driven primarily by higher fuel prices—with just a single type of product," explains Serhiy Lenchuk.
Changing the production model is not an option for Galicia Greenery; the facility’s hydroponic system is designed specifically for growing lettuce, whereas other vegetables require more heat and light. Furthermore, production volumes are too low for export. Consequently, the company continues to grow lettuce—without cutting back on production—exclusively for the domestic market.
The situation is unpredictable, so it is not worth taking the risk of switching to other crops. We plan to enter the season with the same production volumes as last year to ensure customers have access to fresh produce, given that lettuce from Italy and Spain reaches store shelves at least a week after harvesting. If power and gas outages become too severe, we will reconsider our decision.
Source Виробники зелені жертвують прибутком, щоб утримати ринок — AgroPortal.ua