Kostanay Region remains one of Kazakhstan’s main agricultural regions. Around 5 million tonnes of wheat are grown here each year—almost a quarter of the country’s total harvest—more than 220,000 tonnes of milk are produced, and the region accounts for around one third of Kazakhstan’s exports of processed agricultural products.
But further growth in the agricultural economy increasingly depends less on how much additional grain or milk can be produced.
The main reserve lies further along the chain: in how much value the region can create from raw materials it already produces.
This is the basis of the new development logic for agriculture: modern farms instead of simply increasing livestock numbers; cheese and powdered mare’s milk instead of selling only raw milk; starch, gluten and bioethanol instead of grain; and technology-intensive production and digital services instead of the traditional agricultural model.
In effect, Kostanay is trying to industrialise its agricultural sector.
From harvest volumes to the value of the harvest
For a long time, agriculture was measured primarily in physical terms: hectares, yields, livestock numbers, and tonnes of grain or milk.
These indicators still matter. But they have natural limits.
A region cannot expand its sown area indefinitely or keep increasing raw-material output at the same pace. Moreover, raw commodity prices are highly dependent on external market conditions.
What happens after the harvest therefore matters increasingly.
Regional documents state this logic explicitly: the objective is to move towards a full production cycle—from field and farm to deep processing and finished products.
Grain provides the clearest illustration of the economics behind this transition.
A simple calculation is cited for one deep-processing project: a tonne of grain costs around KZT 85,000, while the value of products obtained after deep processing can reach KZT 500,000.
This does not mean profits increase sixfold, because processing itself requires equipment, energy, technology, labour, logistics and capital.
But it is precisely in these additional operations that a new layer of economic activity emerges.
Instead of a single raw commodity, an entire production chain appears, creating jobs, investment demand and new capabilities along the way.
Milk is becoming an industrial sector
This restructuring is especially visible in dairy farming.
Kostanay Region produces more than 220,000 tonnes of milk a year. The focus today, however, is not only on the volume of raw milk, but on creating a modern industrial base for stable production and subsequent processing.
Sixteen major projects to build modern dairy farms are being implemented in the region.
Seven complexes have already been commissioned, another nine are under construction, and five of those are nearing completion.
The new farms are equipped with automated milking systems, milk cooling, and feed and animal-health monitoring. Following the launch of the first complexes, milk yields at agricultural enterprises increased by 15.7%.
This represents an important change in the livestock-production model itself.
A modern dairy farm is no longer simply a farm with a large herd. It is becoming a production complex in which results depend on equipment, automation, feed quality, veterinary control and data management.
At the same time, such a farm creates a stable raw-material base for the next link in the chain—processing enterprises.
From milk to an export-market product
The next stage is to increase the value of the milk after it has been produced.
S-Agro Borovskoe operates in Mendykara District as Kazakhstan’s first producer of powdered mare’s milk. Investment totalled KZT 3 billion and annual capacity is 40 tonnes.
The key point here is not the scale of production, but the product itself.
It is based on freeze-drying technology, which makes it possible to produce a long-life product without preservatives. The project is certified to EAEU standards and is export-oriented; supply agreements have been reached with Germany.
A traditional Kazakhstani product is therefore being transformed into a technology-intensive good that can be stored, transported over long distances and sold at a different price point.
The MILKH cheese plant illustrates a similar logic.
The plant was built from scratch, is equipped with modern European machinery and produces more than 20 types of cheese. Investment amounted to KZT 7.2 billion and capacity is 10,000 tonnes of finished products a year. Production targets both the domestic market and exports to CIS countries, Asia and Europe.
In both cases, the same litre of milk passes through more stages within the region.
As a result, a larger share of the value created also remains within the region.
Grain is becoming more than just grain
The shift towards deep processing of crop products is larger in scale still.
Kostanay Region grows around 5 million tonnes of wheat a year. Historically, the most natural form of processing for such a volume was flour production.
That segment continues to develop. In 2024, the Aruana-2010 flour-milling complex opened in Kostanay at a cost of KZT 3 billion. Production is fully automated and equipped with modern Turkish machinery.
But the next stage goes much deeper.
The KZT 71 billion Qostanai Grain Industry project provides for 650 jobs and the production of starch, gluten, syrups, amino acids, bioethanol and other products from grain.
This is already a different type of economy.
Wheat ceases to be only a final commodity or a raw material for flour. It becomes an input for the food, chemical and energy industries.
The next direction announced is bioethanol production targeting the European market, with the potential for subsequent production of sustainable aviation fuel (SAF).
If projects of this kind are implemented at the announced scale, the region’s agriculture will become far more closely intertwined with industry.
The boundary between the “agricultural” and “industrial” sectors is becoming increasingly blurred.
Grain is not the only crop that can be processed
The same strategy is being extended to other crops.
KAIZEN operates a modern pulse-processing facility and already exports to Türkiye and Afghanistan. Investment totalled KZT 4 billion and 70 jobs were created.
Another major project is the new Konditerskaya Stolitsa confectionery complex of Bayan Sulu.
Investment amounts to KZT 14.3 billion, with 260 jobs announced. It is the largest project in the company’s history and is expected to increase output of finished confectionery products.
This example is particularly important because it shows the end point of a long production chain.
At one end is agriculture—grain, milk, pulses and other raw materials.
At the other is a branded product ready for sale to final consumers and for export.
The closer the region can move towards the second end of this chain, the less its economy depends solely on the price of primary raw materials.
Technology is moving directly into the field
But agricultural modernisation is not limited to processing.
The production of agricultural raw materials itself is also changing.
The region’s total sown area exceeds 5 million hectares. Across territory on this scale, even small efficiency gains in technological operations can produce a noticeable economic effect.
Agricultural drones are being developed in the region for field monitoring, spraying and locust control, while farm machinery with automated driving systems is also in use.
Another direction is satellite-based insurance of agricultural risks. Around 259,000 hectares are already insured, equivalent to roughly 5% of the region’s total sown area. Freedom financial group is investing in the development of these solutions.
This is another important transformation.
Technology in agriculture is no longer coming only from machinery manufacturers. IT, satellite data, insurance and financial services are entering the sector.
As a result, a new service sector is emerging around agriculture—one that either did not exist before or operated on a much smaller scale.
Deep processing creates demand further along the chain
The significance of all these projects extends beyond the enterprises themselves.
A modern farm needs equipment, automation, veterinary services and feed.
A cheese plant or grain-processing facility needs packaging, laboratories, cold-storage capacity, energy and quality specialists.
An export-oriented producer needs certification, logistics, financing and access to external markets.
The further raw materials move through the production chain within the region, the more new forms of economic activity emerge around them.
This is where agriculture can generate its own multiplier effect.
At the same time, the development of agricultural processing is directly connected to other major projects in the region.
Deep grain processing requires significant electricity volumes, so new generating capacity becomes a condition for its expansion. Exports of finished products increase the importance of the Tobyl dry port, road corridors and the airport. Growth in more complex production raises demand for technologists, engineers and international-trade specialists.
In other words, the modernisation of agriculture is gradually drawing energy, logistics, education and the financial sector into its orbit.
Agriculture remains a core sector—but its role is changing
Discussion of deep processing can sometimes sound as though agriculture is supposed to give way to industry.
For Kostanay Region, framing the issue this way makes little sense.
The scale of agricultural production remains one of the region’s key competitive advantages. Millions of tonnes of grain, developed livestock farming and vast agricultural land are precisely what create the foundation for a new processing economy.
The objective is therefore not to become “less agricultural”.
The opposite is true: agriculture itself needs to become more complex, more technology-intensive and more economically substantial.
Fields should create demand for technology. Farms should create demand for industrial equipment. Raw materials should create demand for processing. Processing should create demand for logistics, packaging, energy and export services.
Agricultural specialisation can then cease to be a constraint on development and become a foundation for new industries.
The main resource is the raw material already being produced
Kostanay Region already has something many regions have to build from scratch: a large and stable agricultural base.
Almost a quarter of Kazakhstan’s wheat, substantial milk production, a large land base and developed agricultural production are already in place.
The main question for the next stage is therefore not only how to produce even more.
Far more important is how much economic value can be created from every tonne of grain already produced, every litre of milk and every hectare of land.
The first elements of this model are already visible: modern dairy farms, cheese plants, powdered mare’s milk, pulse processing, deep grain processing, bioethanol, new food production, agricultural drones and satellite-based insurance.
If these directions form a sustainable system, the result will be more than simply more productive agriculture.
Kostanay will be able to turn one of its oldest competitive advantages—its large agricultural sector—into a source of new industry, technology and higher value added.