Ukrainians are used to an excessive quantity of vegetables in season and a lack of produce in the off season. As a results, vegetables sold during the harvest season for a penny are often very expensive in the winter and of relatively low quality. The price fluctuations are amplified during the winter-to-spring period when imported produce (cucumbers, tomatoes, peppers, apples, and potatoes) comes into the markets at very high prices. For example, tomatoes cost less than $0.20 per kilogram during harvest but are priced at more than $3 per kilogram in the winter. Starting in May, the period of intensive trade begins. Sales volumes increase during the summer, reach a seasonal peak about September, and start to decline again by November. Use of modern, specially equipped storage with cooling equipment is now one solution to extend the season, level price changes, and improve revenues for Ukrainian farmers.

In order to extend the produce sales season, Land O’Lakes encouraged the service cooperative Fruits of Crimea, Ukraine, to purchase premises and construct a cold storage facility with a capacity to handle 150 tons of produce. Formed in March 2005 as a private enterprise, the cooperative provides its members with a place to store harvested produce so that they can sell it later when prices rise.

Fruits of Crimea applied to a matching grants program offered by the Land O’Lakes Agricultural Marketing Project, and after demonstrating the value-added business potential, the cooperative was awarded a 127,000 UAH (approximately $25,000) grant. The cooperative members invested an equal amount, and in October 2005 they launched a double-chambered cold storage facility. According to plan, 50 tons of table beets were put in one chamber and 100 tons of cabbage in the other.

The produce was mainly sold to resorts and through the PRIVOZ wholesale market in Simferopol. By using the produce storage facility, Fruits of Crimea added nearly 100,000 UAH (around $20,000) to profits, compared to the profit potential if the produce had been kept in ordinary, unrefrigerated storage. Usually, 35 to 40 percent of the harvested commodities are lost under ordinary storage conditions. Each cooperative member got his share of profit (around 33,000 UAH). Moreover, four full-time jobs were created to maintain the storage facility in proper condition, further benefiting the local economy. Because of the positive returns generated from the vegetable storage facility, two additional 100-ton-capacity chambers have been built, leveraging the initial grant support two times.

Land O’Lakes provided consulting services on cold storage as well as cooperative business management and many construction and technical aspects. In addition, the Agricultural Marketing Project introduced the cooperative supplier to vegetable market buyers.

The founders and members of the cooperative realized positive results from their joint work. Operating on strong business principles, the Fruits of Crimea cooperative is likely to generate more opportunities and expand its produce market reach from Crimea to all of Ukraine.