AUSTRALIA: CHRONICALLY WET IN THE EAST -- FREEZE MAY HAVE DAMAGED WHEAT IN THE WEST
During August 1998, crop areas in Queensland and New South Wales received 2 to 4 times their normal rainfall. While initially beneficial, the gradual trend of increasing wetness was punctuated by heavy downpours at month's end. In the west and southeast, August rainfall was highly variable, with a pocket or extreme dryness centered over western Victoria. During the first week of September 1998, rainfall was heavy over the northern winter grain areas of New South Wales. Light to moderate rain covered the already wet wheat and barley areas of southern Queensland. In addition, locally heavy rain threatened unharvested sugarcane in Queensland's growing areas. Although long-term moisture was abundant for winter grains and sugarcane, the wetness in eastern agricultural districts sparked concern for flooding, crop damage, and the potential appearance of disease and pest problems. Elsewhere, light to moderate rain swept across the winter grain belts of Western Australia and the southeast, maintaining mostly favorable topsoil moisture reserves.
During September 6 - 12, widespread, locally heavy rain again covered most eastern crop areas. The soggy weather plaguing Queensland and northern New South Wales maintained abundant moisture reserves for crop development but caused concern for the quality of winter grains and sugarcane. In addition, wetness caused sorghum and cotton planting delays, although record moisture reserves favored good early development. Lighter showers benefitted previously dry areas centered over western Victoria. In contrast, mostly dry weather continued over winter grain areas of South Australia. Showers were also light in crop areas of Western Australia, dampening topsoils as crop growth increased. From September 13 - 19, light to moderate showers kept winter grains unfavorably wet in eastern Australia's main agricultural districts. The rain also slowed recovery of unharvested sugarcane following weeks of untimely wetness. Elsewhere, light rain dampened topsoils in the western and southeastern winter grain areas as periodic coolness slowed crop growth rates.
During September 20 - 26, moderate to heavy rain swept across the southeast, improving moisture levels for vegetative wheat and barley. Although coverage was very good, dry pockets persisted in northwestern Victoria and western crop areas of South Australia. Farther north, needed dryness covered the Darling Downs area, but showery conditions in southern Queensland kept maturing wheat and barley unfavorably damp.
Finally, during September 27 through October 3, much-needed, drier weather dominated the east. The break in the chronically wet pattern, accompanied by above-normal temperatures favored mature winter grains and allowed cotton and sorghum fields an opportunity to dry prior to planting. Lingering light showers kept topsoils moist across the southeast. In Western Australia, scattered , mostly light showers covered southern sections of the winter grain belt as the north remained dry. That week temperatures were mild, although unseasonable coolness lingered early in the week over sections of the west. On two days in late September temperature dropped below freezing in the wheat growing area of West Australia. However, the extent of any permanent damage should beome evident in a few weeks.
ARGENTINA: RAINS FAVORED VEGETATIVE WINTER WHEAT
During August 1998, below-normal rainfall reduced topsoil moisture for winter wheat establishment across central Argentina, especially southern Buenos Aires. During the first two weeks of September, mostly dry weather prevailed across much of central Argentina. Heavier rain increased topsoil moisture for winter grains in central Santa Fe and Entre Rios. Minimum temperatures fell below freezing across southern Buenos Aires, burning back emerging winter wheat. In central Argentina, during the week of September 13 - 19, light rain brought little relief to stressed vegetative winter wheat. Topsoil moisture was also needed for fieldwork preparations for summer crop planting. Freezing temperatures again burned back early wheat growth in Buenos Aires. During September 20 - 26, in central Argentina, moderate rain eased dryness for vegetative winter wheat and fieldwork preparations for summer crop planting in central and southern Buenos Aires. More rain, however, is needed in southern Santa Fe. Light to moderate rain favored germinating sunflowerseed in northern Argentina, as planting moves farther south into central Argentina. Temperatures averaged slightly below normal, slowing early wheat growth. Finally during the week of September 27 through October 3, timely moderate to heavy rain fell early in the week across central and southern Buenos Aires, boosting topsoil moisture for vegetative winter wheat. The heaviest rain, however, caused local flooding. Elsewhere, mostly dry weather continued to reduce moisture for wheat development in southern Santa Fe and La Pampa.
INDIA: AUTUMN PLANTING DELAYED DUE TO EXCESSIVE WETNESS
During August 1998, rainfall was near to above normal in nearly all primary crop areas in India. The heaviest rain occurred in northern India along the Ganges, resulting in locally severe flooding of important rice areas. Elsewhere, rainfall was generally beneficial for grains, oilseeds, and cotton, with near- to above-normal temperatures spurring crop development. During the first week of September, mostly dry and warm weather returned to primary oilseed and cotton areas of western India, favoring crop development. Heavy rain continued throughout primary rice areas of eastern India, worsening flooding. From September 6 - 12, moderate to heavy showers returned to important oilseed areas of western India (Gujarat and western Madhya Pradesh). The late shot of monsoon rainfall in that area benefitted immature groundnuts, soybeans, and cotton, as well as course grains and sugarcane. Farther north, showers were generally scattered and light across rice and cotton areas of north-central India, but a few isolated storms west of New Delhi may have damaged maturing crops. During the week of September 13 - 19, unseasonably heavy rain continued over India's western oilseed and cotton areas. Although the rain boosted moisture reserves for immature grains and oilseeds, sunnier skies would have benefitted the development of soybeans and other crops. In addition, maturing cotton in north-central India (Punjab and Haryana) may have sustained some damage. Farther east, mostly moderate rainfall covered rainfed rice areas of east-central India (eastern Madhya Pradesh, Orissa, and Bihar). During September 20 - 26, widespread, unseasonably heavy rain persisted over the northwest, well past the usual date for the retreat of the monsoon. The rain likely caused some degree of damage to maturing cotton in north-central India. Conditions were also unfavorably wet from India's main soybean area (western Madhya Pradesh). Moderate to heavy showers over India's southern interior boosted moisture for summer grains, oilseeds, and cotton and raised irrigation levels for second-season cropping. Finally, during September 27 through October 3, rainfall was generally scattered and light over northwestern India as a seasonably drier weather pattern developed over the region. This was good news for the region's cotton, rice, and oilseed producers, as the lingering late-season showers had been threatening crop quality and causing some localized damage. Moderate to heavy rain continued throughout the southern interior, maintaining abundant to excessive moisture levels for immature summer grains, oilseeds, and cotton. Autumn plantings are likely experiencing some delays from excessive wetness. In the east, heavy showers redeveloped over rice areas of east-central India (Bihar), causing some additional flooding. Rains were light to moderate in rice areas of far eastern India, allowing flood waters to recede, albeit slowly.
EUROPEAN UNION: RECORD GRAIN PRODUCTION STILL FORECAST
The European Union (EU-15) is forecast to produce 210.2 million tons of grain (wheat, coarse grain, and milled rice) for the 1998/99 season, up 4.7 million from last year's previous record level. Wheat output is forecast at a record 103.4 million tons, up 8.9 million or 9 percent from 1997/98. Coarse grain production is forecast at 105.1 million tons, down 4.3 million or 4 percent from last year, while milled rice output is pegged at 1.7 million, up 3 percent from the previous season. Favorable weather throughout the growing season supported wheat production, but hot, dry weather during the summer reduced yield potential for corn in Italy, France, and Spain.
For wheat, area is estimated at 17.0 million hectares, down slightly from last season; however, yield is projected at a record 6.08 tons per hectare. The yield surpasses the previous record of 5.89 tons per hectare in 1996/97. In France, wheat production is forecast at a record 40.0 million tons, based on record area and yield: 5.2 million hectares and 7.66 tons per hectare, respectively. In Germany, record wheat output is forecast at 20.1 million tons due to a record area of 2.8 million hectares and bumper yield of 7.20 tons per hectare. Also, in Spain, Italy, and the United Kingdom, bumper harvests are forecast.
For coarse grains, area is estimated at 19.8 million tons, down 3 percent from 1997/98. Yield is estimated at 5.30 tons per hectare, down slightly from last year's record level. Corn production is estimated at 33.8 million tons, down 13 percent from last season's record due mainly to a lower yield projection for France and reduced area and yield for Italy. Barley production is forecast at 53.4 million tons, up 2 percent from 1997/98 due to a bumper crop in Spain and continued good crops in France and Germany. Rye production is estimated about 4 percent above last season's level at 6.3 million tons as higher area more than offset lower yield. EU-15 oat production is estimated at 6.0 million tons, down 9 percent from 1997/98. The decrease is attributed primarily to wet harvest weather in Finland and Sweden that reduced yield potential and grain quality. For rice, area is estimated at 0.4 million hectares, up marginally from last year due to an expansion of Indica varieties in Italy. Italy's production is estimated at 1.0 million tons as favorable weather has boosted yield to 6.23 tons per hectare. Spain, the other major rice producer is forecast to produce 0.6 million tons, virtually unchanged from 1997/98.
ROMANIA: CORN PRODUCTION REDUCED DUE TO HOT WEATHER
Romania's corn production is estimated at 7.5 million tons, down 1.2 million from last month and down 41 percent from last year's bumper crop. Area is similar to the 1997/98 season at 3.0 million hectares. Hot, dry weather during the summer stressed the crop with early-September rainfall arriving too late to benefit the drought-stricken corn. Yield is estimated at 2.50 tons per hectare, down 40 percent from last year. According to the U.S. agricultural attache in Sofia, by the third week of September, about 10 percent of the corn had been harvested.
CHINA: CORN PRODUCTION HIGHER DUE TO FAVORABLE WEATHER
China is estimated to produce a corn crop of 124.0 million tons during 1998/99, up 2.0 million or 2 percent from last month and up 19 percent from last year's drought-reduced crop. Area is estimated at 24.3 MHa, up 0.5 million from a year ago. The area increase is partly due to farmers shifting from soybeans to corn, which is a more profitable crop. The estimated yield of 5.11 tons per hectare is above the 5-year average, but lower than the 1996/97 record of 5.20 tons per hectare.
USDA analysts traveled through Northeast China and the North China Plain in mid-September and reported harvest proceeding smoothly, with farmers expecting a bumper crop. Warm spring temperatures and abundant rainfall created favorable conditions for planting and germination in the North China Plain and Northeast. Early-summer flooding damaged the crop in southern and central areas of China, but these losses were minor and more than offset by projected high yields in Sichuan, the North China Plain, and the Northwest, where the summer weather was nearly ideal. Widespread flooding during August in western Heilongjiang and eastern Inner Mongolia caused localized crop losses, but high yields were expected in other parts of Northeast China where the heavy rainfall benefitted non-irrigated corn.
ARGENTINA: WHEAT AND CORN OUTPUT ESTIMATED LOWER
Wheat production for 1998/99 is forecast at 10.5 million tons, down 1.0 million or 9 percent from last month, and down 4.3 million or 29 percent from last year. Area is decreased 0.1 million or 2 percent from last month and 1.0 million hectares or 18 percent from last year. The monthly area decrease is due to dry weather in key growing areas which prevented seeding of some land. Area had already been set much lower than last year because of lower expected returns relative to summer crops.
Widespread dryness from Santa Fe southward into Buenos Aires characterized the early portions of the growing season. Recent rains have alleviated much of the dryness in southern and eastern sections of Buenos Aires, but parts of Sante Fe remain dry. According to the U.S. agricultural counselor in Buenos Aires, good subsoil moisture has prevented any significant losses even in Santa Fe, but rain is now needed for grain fill and to recharge subsoil moisture. Yield is forecast at a near-average level following last year's record. Although improved farming practices have resulted in an upward yield trend, season-to-date weather factors and reduced use of fertilizer are expected to reduce overall yield. In Argentina, wheat is planted from May through August and harvested from November through January.
Corn output for 1998/99 is estimated at 15.0 million tons, down 1.5 million or 9 percent from last month, and down 4.3 million or 22 percent from last year's record. Area is forecast to decrease 0.3 million or 9 percent from last month. Planting has commenced in the north, and intentions may not be finalized at this time. The choice will hinge on farmers' perception of the profitability of corn versus soybeans and other alternative crops, as well as soil moisture and rain patterns at planting. Soybeans have a later planting window than corn, and sunflowerseed is generally regarded as being more drought-tolerant. The area decrease for corn is concurrent with an increase in soybean area. Yield is based on a trend line analysis over previous years. Recent dramatic increases in yield have resulted from improved hybrids, increased fertilizer use, better overall farming practices, and, in the case of last year, near-ideal growing conditions. It is expected that the use of a new higher-yielding hybrid, described as a "semi-dent" corn, will increase for 1998/99, thereby increasing yield potential. It remains to be seen, however, whether the prospect of low prices will result in deceased use of needed inputs. Corn in Argentina is planted from October through December and harvested from March through June.
UKRAINE: GRAIN PRODUCTION REDUCED DUE TO DROUGHT
Ukraine's total grain production (including roughly 1.5 million tons of pulses and miscellaneous grains) for 1998/99 is reduced 1.0 million ton this month to an estimated 27.7 million, against 35.3 million last year. Preliminary harvest results indicate that the impact of persistent drought on the corn crop was severe. Hot, dry weather prevailed throughout July in eastern Ukraine, the country's prime corn region, and the crop advanced through tasseling and silking under conditions of extreme stress. August and September weather provided little relief from the dryness in eastern Ukraine, and corn output is forecast to plunge from 5.3 million tons in 1997/98 to 2.0 million this year. Estimates for other grains are unchanged this month. Wheat production is set at 15.0 million tons, down from 18.4 million last year, and barley production is forecast at 6.3 million, down from 7.4 million in 1997/98. As of September 28, the harvest of wheat, barley, and other small grains was essentially complete, with combined yield down 15 percent from last year. During the growing season, small-grain crops suffered damage from heavy rain in western Ukraine and drought in the east.
KAZAKSTAN: WHEAT PRODUCTION REDUCED DUE TO DROUGHT
Total grain production for Kazakstan during 1998/99 is forecast at 7.3 million tons, down from 12.5 million last year. The sharp year-to-year drop reflects a 17-percent reduction in estimated sown area and a 29-percent drop in forecast yield. Wheat production is estimated at 5.5 million tons, down 1.0 million from last month and down 3.5 million from last year. Barley output is estimated at 1.1 million tons, down 0.5 million from last month and 1.5 million from last year. Persistent drought, accompanied by extremely high temperatures, progressed eastward across Kazakstan's prime wheat-production region during June and July.
RUSSIA: GRAIN PRODUCTION DOWN BASED ON HARVEST PROGRESS REPORTS
Russia's grain production for 1998/99 is forecast to fall to its lowest level since 1953. Severe drought in the Volga Valley and Urals, combined with a 3.5-million-hectare drop in sown area and continued economic difficulties, have reduced estimated output to 52.0 million tons (including approximately 1.7 million of pulses and miscellaneous grains), down from 87.7 million last year. Wheat production is estimated at 28.5 million tons, down from 32.0 million last month and down from 44.2 million last year. Barley output is estimated at 10.0 million tons, down from 11.5 million from last month and down from 20.8 million last season. As of September 28, the 1998 harvest campaign was nearing completion. Of the estimated 47.7 million hectares of grain sown on State enterprises, 30.6 million had been threshed, yielding 47.2 million tons. An additional 10.9 million hectares-mostly in the Volga Valley and Urals-reportedly had been destroyed by persistent summer drought, and only 3.7 million hectares remained to be harvested on State farms. Private-sector output is forecast at roughly 5.0 to 6.0 million tons. Russian corn production is estimated at 1.2 million tons, down from 1.4 million last month and down from 2.7 million last year.
INDIA: COARSE GRAIN AND RICE PRODUCTION ESTIMATE LOWERED
India's 1998/99 corn and millet production is estimated to fall below last year's level due to floods in Uttar Pradesh and Bihar and the erratic distribution of rainfall in Rajasthan. Millet production is estimated at 9.7 million tons, down 0.8 million from last month and down 21 percent from the record crop of 12.3 million tons produced in 1992/93. Area is unchanged from last month, while yield is lowered to 0.73 tons per hectare -- nearly equal to the 5-year average. Corn production is estimated at 9.5 million tons, down 0.5 million from last month and down 11 percent from the record crop of 10.6 million tons produced in 1996/97. Area is estimated at 6.1 million hectares, down 0.1 million from last month. Corn yield is estimated at 1.56 tons per hectare, down slightly from last month and near the 5-year average.
The 1998/99 rice crop is estimated at 81.5 million tons (milled basis), down 1.5 million from last month and 2 percent lower than the record crop of 83.5 million produced in 1997/98. Area is forecast at 42.3 million hectares, down 0.2 million from last month. Yield is estimated at 2.89 tons per hectare or slightly above the 5-year average. The decrease in output is based on a government report citing damage to the kharif crop in several important regions. The reduction stems from adverse weather, including drought in parts of Central and West India, floods in the Gangetic Plain, and harvest rains in the surplus producing states of Punjab and Haryana, where quality is likely to suffer. The outlook for most southern states, especially Andhra Pradesh, remains excellent.
JAPAN: RICE PRODUCTION LOWERED DUE TO EXCESSIVE RAINFALL
Japan's 1998/99 rice crop is estimated at 7.9 million tons (milled basis), down 1.2 million or 13 percent from last year due to lower yield and area. Estimated yield, at 6.11 tons per hectare, is the lowest in 5 years, but much higher than 1993/94, when yields were seriously affected by cold weather. Harvested area, at 1.8 million hectares, is the lowest area on record and continues a downward trend since 1994/95. The Japanese Government has encouraged farmers to reduce paddy area as a way to cut production and reduce the burden of excessive stocks.
On September 15, Japan's Ministry of Agriculture, Forestry and Fisheries (MAFF) lowered the 1998/99 rice crop index from the previous "normal" rating of 99 to the "slightly poor" rating of 98 due to unfavorable weather. Western areas of Japan experienced wet weather since mid-July, and northwestern Japan was hit with very heavy rain from August 25 through August 30. Since the September crop estimate, Japan has continued to experience severe weather. Two powerful typhoons swept across Japan on September 21 and 22, bringing high winds and flooding to 15 western prefectures. Rice quality has been hurt by persistent wet weather this month and drier weather is needed to improve crop conditions and facilitate the harvest.
INDONESIA: RICE OUTPUT FOR 1997/98 DECLINES DUE TO INPUT CONSTRAINTS
Indonesia is estimated to produce 30.6 million tons (milled basis) of rice for the 1997/98 season, down 0.3 million from last month. With the main-season 1997/98 rice already harvested and most of the second-crop harvest completed, only a third, smaller crop remains to be harvested this calender year. After a delayed 1997/98 rainy season of up to 2 and a half months, preliminary main-season harvest results were off during the January - April 1998 cycle. Recent field travel by the U.S. agricultural counselor in Jakarta supported a small reduction this month as their report stated that due to higher fertilizer costs and in some places shortages of inputs, farmers were not able to apply inputs at their normal rates. However, the relative wetness of the current dry season from April - September and more rice planting instead of secondary crops is expected to offset some of the decline due to input constraints. Production during the September - December harvest period is expected to be near an average level.
For the 1998/99 season, rice area is forecast to rebound to 11.4 million hectares and production to 33.0 million tons. Because of the late1997/98 rice plantings, the crop seasons are still behind throughout Central and Eastern Java (the areas visited by the U. S. agricultural counselor). As wet conditions in the dry season spurred second-and third-crop plantings, the main-season 1998/99 planting is being delayed slightly in some areas. Access to affordable pesticides and fertilizers will become increasingly important as the season progresses.
BANGLADESH: RICE PRODUCTION FORECAST LOWERED
The 1998/99 Bangladesh rice crop is forecast at 18.0 million tons, down 0.7 million from last month and 5 percent lower than the record crop of 18.9 million tons produced in 1996/97. Area is forecast at 10.4 million hectares, down 0.3 million from last month. Yield is forecast at 1.73 tons per hectare and is below the 5-year average. While the scope and duration of this year's flooding reached crisis proportions in early-September, its impact on total 1998/99 rice production is likely to be limited. Losses incurred by the aman paddy crop (early-winter harvested) are expected to be largely offset by a larger boro (spring-harvested) crop. Although nearly one half of the country was submerged by this year's flood, less than 20 percent of the aman crop area has been severely affected, according to the U.S. agricultural counselor. With 35 of the 56 flood-affected districts back to normal, and road links between Dhaka and other parts of the country restored by the end of September, Bangladesh's Ministry of Agriculture is estimating losses to the agriculture sector of US$1.0 billion, including US$638 million of rice. In areas where the flood has receded, farmers are transplanting aman rice in spite of the fact that late transplanting may result in lower yields.
ARGENTINA: SOYBEAN PRODUCTION ESTIMATED HIGHER
Soybean production for 1998/99 is forecast at 16.5 million, an increase of 6 percent from last month, but still a decrease of 2.2 million or 12 percent from last year's record crop. Area is increased from 6.8 million hectares to a record 7.1 million, an increase of 4 percent over last month, and surpassing last year's area of 7.0 million. The soybean area increase corresponds to a decrease in corn area, as farmers are anticipating higher returns for oilseeds such as soybeans and sunflowerseed. A great deal of uncertainty concerning the area of soybeans and alternative crops still exists as the summer planting season is just beginning. Yield is projected at an above-average 2.32 tons per hectare following last year's record of 2.67, achieved under near-ideal conditions. Recent advances in farming practices and the use of genetically-engineered seed have increased yield potential, however, anticipated lower returns because of lower world prices may discourage heavy use of inputs in the current year. Planting of soybeans begins in November and will continue through January. Harvest is from April through June.
INDONESIA: PALM OIL NEGATIVELY AFFECTED BY WEATHER, FINANCES
Drought, and haze from fires in 1997 have apparently reduced yield prospects for Indonesian palm oil. Additionally, the financial crises is having a dampening affect on plantation expansion. The production estimate for 1997/98 (Oct.-Sep.) is being reduced this month by 0.75 million tons, to 5.0 million, while the estimate for 1998/99 is being reduced 0.5 million tons, to 5.5 million.
An unofficial survey of several plantation managers (private and state plantations) indicate that many plantations have experienced yield reductions (in fresh fruit bunches) for the first six months between 30 to 50 percent compared to the same time last year. According to these managers, yields have improved for the months of June and July. Palm oil production for 1998/99 is forecast to rebound somewhat. Reportedly, by the end of July 1998, production has started to pick up again as rainfall has been sufficient and distributed evenly. However, the major impact of drought on palm oil production is often observed 18 to 24 months after dry conditions occur. Another area of concern for next year's production is the high prices of imported fertilizers, the fertilizers used on oil palm trees are mostly imported, except for urea.
Industry sources confirm that the expansion in area of oil palm plantations continues, however, at a much slower rate compared to previous years. This year's expansion is estimated to amount only to 60,000 hectares, substantially lower than the 200,000 to 300,000 hectare pre-financial-crisis level. After planting occurs it takes about two and one-half years before harvest of palm fruit begins.
UNITED STATES: CROP CONDITION AND PROGRESS
Above-normal temperatures across most of the Nation caused crops to ripen ahead of normal in the Corn Belt, Great Plains, Delta, and Southeast. Most of the Great Plains remained dry, allowing fall tillage operations to continue at a good pace, but dry soils forced some growers to delay winter wheat seeding. Dry weather in the Corn Belt and Delta States aided harvest efforts, while rains from tropical storms frequently halted fieldwork along the Gulf Coast and some inland areas of the Southeast.
Above-normal temperatures aided crop development in the Southwest for most of the month, but development continued to lag behind the 5-year average. Temperatures cooled near the end of the month in California, but crops continued to ripen and harvest activity gained momentum.
Corn development entered the month a week or more ahead of normal and continued to progress rapidly to maturity due to warm weather. Across the northern Corn Belt, progress was nearly 2 weeks ahead of the normal pace. Four percent of the crop was harvested as the month began and approximately a fourth of the crop was harvested by the end of the month. Nearly all of the Nation's soybean crop had progressed to the pod setting stage and 13 percent was dropping leaves as the month began. Dry weather quickly ripened the crop and allowed the harvest to gain momentum near mid-month. The harvest pace accelerated late-month and, by the end of the month, a third or more of the crop had been combined.
Cotton also matured quickly, with bolls opening on half of the crop as the month began and more than one-fourth harvested by the end of the month. Tropical storms hampered harvest efforts and damaged cotton along the Gulf Coast. More than a fourth of the rice crop had been harvested as of September 1 and harvest progressed ahead of average in Texas and the Delta States. In California, harvest began late and progressed behind the 5-year average. Peanut harvest started early in Florida, but slowed after tropical storms hit peanut-producing areas along the Gulf coast. Harvest in the major peanut-producing areas of Georgia, Alabama, and the Carolinas was hampered by hard, dry soils early in the month and by heavy rains most of the remainder of the month.
Dry weather across the northern Great Plains and Pacific Northwest allowed barley and spring wheat harvest to finish at least 2 weeks early in most areas, and nearly 3 weeks early in some parts of Montana and North Dakota. Early month dry weather also allowed winter wheat seeding to advance, with Washington growers seeding over a third of their crop by the end of the first week.
However, seeding progress generally lagged throughout the month, as growers waited for rain to replenish soil moisture.
FORMER SOVIET UNION: WEATHER AND CROP DEVELOPMENTS
In crop areas west of the Ural mountains, near- to above-normal precipitation continued in northern Russia, maintaining adequate to excessive moisture conditions for winter grain development. Farther south, drought persisted in southern Russia (North Caucasus, lower Volga Valley, and the central Black Soils Region) and eastern Ukraine, helping corn, sunflower and sugar beet harvesting. However, winter wheat planting likely progressed slowly in these areas as growers waited for rain to improve emergence prospects. In most years, late planting reduces the likelihood that winter wheat will become well established prior to entering dormancy, making the crop more susceptible to potential winterkill. Elsewhere, above-normal precipitation fell in Belarus and western Ukraine, slowing summer crop harvesting but providing abundant moisture for winter grain planting. Since early October, unseasonably cold weather pushed southward over most of Russia and Ukraine, slowing the vegetative growth of winter grains. Furthermore, sub-freezing temperatures were observed as far south as northern Ukraine, prompting cold-hardening in winter grains. Light, scattered showers fell in winter wheat areas of eastern Ukraine and southern Russia, bringing some relief from unfavorable dryness.
In crop areas east of the Volga Valley, the bulk of spring grains are harvested in September. In Russia, cool, showery weather in September slowed spring grain harvesting, especially during the last 10 days of the month. Since early October, wet weather, including some wet snow, caused further harvest delays. In Kazakstan, below-normal precipitation in September allowed rapid spring grain harvesting. Scattered showers since early October likely caused only brief delays in late-harvest activities.
Tom Puterbaugh (202) 720-2012
FEATURE COMMODITY ARTICLES
EUROPEAN UNION OILSEED PRODUCTION
Total oilseed production in the European Union (EU) for 1998/99 is projected to be 15.8 million tons, up 5 percent from last year's record crop of 15.0 million tons. Overall, oilseed yield is at a record 2.48 tons per hectare, up 1 percent from last year. Harvested area is forecast at 6.4 million hectares, up 5 percent from last season, and marginally below the 1994/95 record.
France is the largest producer of oilseeds with 36 percent of EU output. France is the biggest producer of rapeseed and sunflowerseed which are the two largest oilseed crops in the EU. Italy is the largest producer of soybeans which is the third largest oilseed crop in the EU. France is estimated to have increased its total output by 1 percent from 1997/98, while Italy increased its output 17 percent and Denmark increased output 13 percent. Similar to 1997/98, the EU maximum guaranteed area for oilseeds will be exceeded in 1998/99. Therefore, compensatory payments to oilseed producers may again be reduced and penalties cumulated with those of 1997/98. Market prices for rapeseed in comparison with grain prices were perceived to be attractive as EU rapeseed area in 1998/99 increased 10 percent over 1997/98. This occurred although the obligatory set-aside rate for arable crops in the EU was left unchanged at 5 percent. The bulk of EU rapeseed is winter rapeseed, and the harvest is nearly complete. The largest quantity increases are being reported in the United Kingdom, France, and Germany.
Weather was generally favorable and the 1998/99 EU rapeseed crop is estimated at a record 9.5 million tons.
The EU 1998/99 sunflowerseed crop is estimated lower than last season due mainly to a 12-percent area decline in France. Lower yields for sunflowerseed, especially when compared to rapeseed, have stimulated a shift away from sunflowerseed. France and Spain together account for about 80 percent of EU sunflowerseed production. The Spanish sunflower crop this year looks very good, though output is forecast to be 5 percent less than last year's record yielding crop. The southern Spanish crop has been harvested and was a good crop; however, dry weather in the Northeast caused some concern until rains improved prospects late in the growing season.
Italy's farmers continued to expand their area in soybeans, increasing area to 0.4 million hectares, with production forecast at 1.5 million tons, up 21 percent from 1997/98. The main reason for the increase in soybeans was a relatively weak market outlook for corn in early 1998 when farmers had to decide between the two crops. In February 1998, the price of soybeans was almost double that of corn which convinced many farmers of the Po Valley to shift some area from corn to soybeans.
Paul Provance, Oilseeds Chairperson
STRUCTURAL CHANGES IN TURKISH COTTON PRODUCTION
Cotton production in Turkey for 1998/99 is forecast at 3.7 million bales, down 0.1 million or 3 percent from 1997/98. At the outset of the season, unusually cool and wet weather had a significant negative impact on the development of young cotton plants. As much as 30 percent of the Aegean crop was replanted and prospects for recovery did not appear favorable. Also, cool weather and flooding in other cotton-growing areas, particularly the southeast, had a negative impact on production, though problems in other cotton areas have not been as severe as in the Aegean region. Preliminary reports had forecast a 15-percent decline in the Aegean region as a result of both reduced area and yield. As the season progressed, weather turned hot and dry allowing cotton to overcome the retarded development. Currently, harvest conditions have been favorable, negating earlier pessimism. (Charts: area, yield, production, data)
These seasonal fluctuations in production because of volatilities in weather will continue. However, structural changes are occurring in the industry that are likely to push cotton production to a higher level. These changes were set in motion by the Southeastern Anatolian Project (GAP).
The cotton industry is on the verge of becoming more mechanized and less labor intensive. However, at present, virtually all of Turkey's cotton is handpicked. Over the years, farm labor has become more scarce and expensive due to rural-urban migration and the increasing development of Southeastern Turkey that has created more off-farm jobs. Labor costs have risen, accounting for nearly 40 percent of total production costs, adding to the already relatively high costs of cotton production. This has caused farmers to shift to less input-intensive crops in traditional cotton growing areas. As a result, the government is increasingly interested in machine harvesting.
The impact of higher production costs can be seen in decreasing cotton area. Prior to planting, the cotton industry expected 1998/99 area to rise due to increased local demand and higher lint prices. Although the domestic lint prices were high relative to other crops, farmers' still reduced area slightly from last year to 0.7 million as they opted for commodities with lower production costs.
Turkish cotton is grown in three main regions: the Aegean, Cukurova, and southeastern Anatolia. Small amounts of cotton are produced in Antalya. The Aegean region is the largest growing area, producing over 40 percent of the crop. Aegean cotton generally is considered to be the best quality and is preferred for its longer staple length by the local textile industry.
Currently, a major shift from cotton production is occurring in Cukurova, where farmers are shifting to a wheat-corn rotation or horticultural production. However, given the current pace of extending irrigation infrastructure in the GAP, the rise in cotton area there is expected to offset declining cotton area in traditional growing areas--such as Cukurova-for at least the next several years.
Generally, cotton is planted between mid-March and mid-May and harvested from mid-August into November. The most popular varieties are: "Nazilli 84" in the Aegean region, "Carolina Queen" in Cukurova, and "Delta pine" and "Stone Mill" in the Southeast.
Cotton production is expected to expand significantly in southeastern Anatolia as a result of the GAP. The GAP is a rural and urban development project geared toward improving overall living standards in southeastern Turkey. It consists of a series of dams, power stations, tunnels and canals to generate electricity and irrigate the plains surrounding the Tigris and Euphrates rivers. The goal is to irrigate a total of 1.7 million hectares when completed. Initially, the project was expected to be completed by 2005, but now GAP administrators concede that completion is unlikely before the year 2010 or beyond. Currently, about 90,000 hectares on the Harran Plain are irrigated by the Ataturk dam. Cotton is grown on about 80 percent of this newly irrigated area.
Most of Turkey's estimated 500 gins are privately owned. Nearly all gins in the Aegean region are roller gins, which are more suitable for longer staple cotton. About half the gins in Cukurova and the Southeast are roller gins and the remainder are saw gins. The ginning rate averages about 42 percent in the Aegean Region and 39 percent in Cukurova. Generally, the gin owners purchase seed cotton from growers. As a result, gins play an important role in the domestic marketing channels. Lint is graded and certified by government-regulated inspectors at the gins, using the green card system. Domestic regulations require that all locally produced cotton be ginned before the end April.
Agriculture is an important sector of Turkey's economy--nearly 40 percent of the population lives in rural areas and earns the bulk of their income from farming. As a result, agriculture and rural development are top government priorities. The massive investments in the GAP are probably the best example of this policy.
The quasi-government farmers' cooperatives, TARIS, Cukubirlik, and Antbirlik provide their members with low-cost loans, seed, and fertilizer and are supposed to buy members' cotton at government announced prices. However, constant political intervention in management and lack of funds have prevented coops from functioning effectively.
Most observers expect that as long as cotton prices remain strong, the government will retain the traditional system of announcing seed cotton support prices just prior to harvest at a level below international prices and allow domestic supply and demand conditions to determine price. The dilemma for the government is to set prices sufficiently high to encourage production, but not excessively high so that the cost of raw materials puts the Turkish textile industry at a competitive disadvantage to foreign cotton producers.
Some observers believe it would be more effective for the government to return to the premium system implemented only for the MY 1994/95 crop. Under this system, the government paid an attractive premium (which-in-effect was a production subsidy) to farmers
who had registered their sales as a means of controlling "off-the-books" textile economy. The program was deemed too expensive and discontinued, but proponents believe it would have stimulated production and additional tax revenues gained would have outweighed the costs.
There are no special input subsidies for cotton; however, subsidized credit is available at about half the commercial rate. Also, the government provides about a 10-percent subsidy on the cost of all fertilizers. Irrigation water is provided by the State Irrigation Authority (DSI) for a fee. However, there is a continuing debate whether the price of water represents its actual cost. Irrigation supplies are not expected to be a problem following this year's wet spring weather. Pesticides are commercially available. Except for minor white fly damage in Cukurova, insect and disease damage generally are not major problems.
Ron Roberson, Cotton Chairperson
Telephone: (202) 720-0879