February 1999

WEATHER BRIEFS

CHINA: PERSISTENT DRYNESS AFFECTS WHEAT IN THE NORTH CHINA PLAIN

From September 1 to December 31,1998, precipitation averaged less than 25 percent of normal in the North China Plain, resulting in poor establishment of rainfed winter wheat. Adequate irrigation supplies, however, existed for irrigated winter wheat. Winter wheat remained dormant across most of the region, despite above-normal December temperatures. Near- to above-normal precipitation favored vegetative winter grains and oilseeds across the lower Yangtze Valley. During the first week of January, dry weather prevailed across most of the country. From January 1 - 16, cold weather kept winter wheat dormant across the North China Plain. During January 17 - 30, winter wheat remained dormant across the North China Plain, despite warm weather--temperatures 2 to 7 degrees C above normal. Light rain fell across the southern North China Plain, increasing moisture supplies for semi-dormant winter wheat during the week of January 17 - 23. Seasonably dry weather continued to prevail across the rest of the North China Plain. Light to moderate rain covered southeastern China, favoring vegetative winter grains and oilseeds. During January 24 - 30, light to moderate rain covered the Yangtze Valley. From January 31 through February 6, the North China Plain remained dry, while light to moderate rain again fell across the Yangtze Valley, boosting soil moisture for winter grains and oilseeds.

BRAZIL: TIMELY RAINFALL MAINTAINS SOYBEAN CONDITIONS

During December 1998, slightly below-normal rainfall caused some stress to soybeans in Rio Grande do Sul and Parana. Elsewhere in southern Brazil, near-normal rainfall maintained adequate soil moisture for soybean development. During the first nine days of January, warmer weather and below-normal rainfall limited soil moisture for soybean development. Temperatures averaged 2 to 3 degrees C above normal in Rio Grande do Sul and near normal elsewhere in southern Brazil. From January 10 - 16, timely rain benefitted soybeans in Rio Grande do Sul and eased short-term dryness. Consistent rainfall will be needed to ensure adequate soybean crop prospects. Elsewhere in southern Brazil, widespread showers maintained adequate to abundant soil moisture for soybeans. Temperatures averaged near to slightly below normal across Grande do Sul and slightly above normal elsewhere in southern Brazil. During January 17 - 23, in northwestern Rio Grande do Sul, continued below-normal rainfall stressed soybeans. Temperatures averaged 2 to 3 degrees C above normal, increasing stress. Elsewhere in southern Brazil, widespread moderate showers maintained adequate moisture supplies. During January 24 - 30, showers eased dryness in northern Rio Grande do Sul, but the westernmost areas of the state received less than 10 millimeters. Elsewhere in southern Brazil, showers maintained adequate moisture supplies for reproductive soybeans. During January 31 through February 6, showers covered northwestern Rio Grande do Sul, which had been dry. Elsewhere in southern Brazil, showers maintained adequate moisture supplies for reproductive soybeans.

ARGENTINA: SHOWERS BENEFIT CENTRAL SUMMER CROP AREAS

During December 1998, timely mid- to late-month rainfall maintained average yield prospects for corn and soybeans in east-central Argentina. Below-normal rainfall in southern Buenos Aires favored wheat maturation and harvesting but stressed vegetative corn. During the first nine days of January light to moderate rain covered the main summer crop areas of central Argentina, aiding reproductive corn and soybeans. Late in the period heavier rain fell near the city of Buenos Aires. Most of the period was dry in northern Argentina, favoring cotton development. During January 10 - 16, light to moderate rain again aided reproductive corn and vegetative soybeans across most crop areas of central Argentina. However, lighter rain fell across central Buenos Aires, increasing available soil moisture. Light rain covered northern Argentina's cotton areas. From January 17 - 23, mostly dry weather prevailed in central Argentina. While moderate to heavy showers covered northern Argentina, causing some local flooding, but boosting moisture supplies for cotton and soybeans. During January 24 through February 6, widespread showers covered the region, benefitting corn, soybeans, and sunflowers. The rain during the week of the 24^th, was especially beneficial in the province of Buenos Aires, where dryness has been a concern. In northern Argentina, moderate showers aided cotton and soybeans.

PRODUCTION BRIEFS

ARGENTINA: WHEAT PRODUCTION RECOVERS

The 1998/99 wheat crop is forecasted at 10.8 million tons, up 0.5 million or 4 percent from last month, but down 4.1 million or 27 percent from last year's bumper crop. All of the wheat crop has been harvested and the estimated area rose slightly to 4.8 million hectares. A combination of reduced input use due to depressed prices at planting and inclement weather in southern Buenos Aires are contributing factors for the reduction of the 1998/99 wheat crop from last season. Earlier dryness during November and December 1998 adversely affected the wheat crop in southern Buenos Aires Province. Near normal rainfall since late December boosted wheat yield in the central provinces of Cordoba, Santa Fe, Entre Rios, and northern Buenos Aires. While wheat in southern Buenos Aires was stressed, normal- to- below normal temperatures during the growing season in the central provinces supported crop development. Wheat yield is estimated at 2.25 tons per hectare, up 3 percent from last month, but down 13 percent from last year's record.

PHILIPPINES: RICE PRODUCTION DOWN, CORN PRODUCTION RISING

According to the U.S. agricultural counselor in Manila, Philippine agriculture took a beating in 1997/98 with rice and corn production dropping by 11 and 16 percent, respectively, from 1996/97. Dry season rice and corn suffered the most from the extended El Niño drought pulling down overall output for the market year. Tight water supplies resulted in considerable shrinkage in area planted to both grains compared to the previous year. Hybrid corn seed utilization in 1997/98 dropped to an estimated 15 percent of all corn planted from the 20 percent utilization rate the previous year.

The 1998/99 milled rice production is estimated at 6.7 million tons, down 0.3 million tons or 4 percent from last month, but up 3 percent from 1997/98. In late 1998, three successive typhoons heavily damaged grain production areas on Luzon island. Some, but not total, recovery is predicted for the 1998/99 dry season rice crop.

Corn production for 1998/99 is estimated to be 4.8 million tons, up 0.6 million tons or 14 percent from last month, and up 36 percent from last year. Corn production is expected to grow because of increased area planted and better yield. Increased area can be partially attributed to below-normal water levels in major water reservoirs and dams in the first half of 1998/99 which resulted in a shift to corn by some sugar farmers. In addition, the 1998/99 hybrid corn seed use is expected to be at a higher percentage level than last year.

RUSSIA: GRAIN ESTIMATES REVISED LOWER

Wheat and coarse grain production estimates for 1998/99 have been revised based on the release of preliminary harvest results by the Russian State Statistical Committee. Wheat production is estimated at 26.9 million tons, down 0.1 million from last month and down 17.3 million from last year. Barley production is estimated at 9.8 million tons, up 0.3 million from last month and down 11.0 million from last year. Rye production is estimated at 3.3 million tons, down 1.2 million from last month and down 4.2 million from last year. Oats production is estimated at 4.6 million tons, down 0.9 million from last month and down 4.8 million from last year. Corn production is estimated at 0.8 million tons, down 0.2 million from last month and down 1.9 million from last year. The sharp year-to-year drop in output is attributable chiefly to two factors: wheat and coarse grain yields suffered from severe drought in the Volga Valley and the Urals and coarse grain area is down 3.1 million hectares (12 percent) from last year.

UKRAINE: GRAIN PRODUCTION REVISED DOWN

The U.S. agricultural counselor in Kiev revised wheat and coarse grain production for 1998/99 based on preliminary government harvest results. Wheat production is estimated at 14.9 million tons, down 0.1 million from last month and down 3.5 million from last year. The lower wheat harvest is due primarily to a 14-percent year-to-year decrease in estimated area. Also, coarse grain area is down from last year, by 8 percent, and yields were severely affected by hot, dry weather that prevailed over southern and eastern Ukraine as the crops advanced through the reproductive stage of development. Barley production is estimated at 5.9 million tons, down 0.3 million from last month and down 1.5 million from last year. Rye production is estimated at 1.1 million tons, down 0.1 million from last month and down 0.3 million from last year. Oat production is estimated at 0.8 million tons, down 0.2 million from last month and down 0.3 million last year. Corn production is estimated at 2.0 million tons, up 0.4 million from last month, but down 3.3 million from last year.

ARGENTINA: SOYBEAN PRODUCTION ESTIMATED HIGHER

Argentina's 1998/99 soybean production is estimated at 18 million tons, the second highest on record, up 0.5 million or 3 percent from last month, but down 4 percent from last year's record crop. Estimated harvested area is 7.1 million hectares, down 0.2 million from the previous month due to the impact of earlier dryness. The earlier dryness in the south encouraged some farmers in the province of Buenos Aires to shift area from corn to soybeans, but not to the extent believed earlier. Near normal rainfall since late December benefitted the soybean crop in Cordoba, Santa Fe, Entre Rios, and northern Buenos Aires.

BRAZIL: SOYBEAN PRODUCTION ESTIMATED HIGHER

Brazil's 1998/99 soybean crop is estimated as the second highest on record at 30.5 million tons, up 3 percent from last month, but down 3 percent from last year's 31.5 million tons. The estimated harvested area remains unchanged from last month at 12.8 million hectares. Near-normal to normal rainfall amounts improved prospects for the soybean crop throughout most of the country despite some isolated pockets of dryness which remain in Rio Grande do Sul after dryness in November-December in Rio Grade do Sul and Parana caused concern for the crop early in the season. Though world commodity prices are lower this year than they have been, reports indicate fertilizer consumption in Brazil this season was near last year's level.

UNITED STATES: CROP CONDITION AND PROGRESS

The month began with frigid temperatures across most of the eastern half of the United States. Blizzard conditions developed as the cold air pushed through the central Corn Belt and Great Lakes Region. Most wheat fields in the northern Plains and eastern Corn Belt were protected from

the sub-zero temperatures and wind chills by snow. Below-normal temperatures extended to the Gulf Coast, with sub-freezing temperature readings in Texas and as far south as central Florida. Peach orchards in the Southeast, in need of additional chill hours, welcomed the cold weather, but tomatoes suffered minor leaf burn in Florida. In lowland citrus groves, some fruit was partially frozen and some new foliage was frost bitten, but damage statewide was minimal. Sugarcane and orange harvest continued unhindered. In Texas, the cold weather temporarily halted growth of small grains.

As the month progressed, seasonally mild weather remained entrenched over the Rocky Mountains and extended eastward into the Great Plains, Corn Belt, and Southeast. Despite the beneficial warm weather, growth of small grains was limited in the southern Plains due to excessive dryness. In Florida, warm weather promoted development of citrus bloom buds and open bloom flowers and aided vegetable growth. Dry weather forced citrus growers in sandy and well-drained areas to irrigate groves to maintain tree conditions.

During the month, a series of storms formed along the western Gulf Coast and delivered a mixture of rain, sleet, and freezing rain to the lower Mississippi Valley, Southeast, Ohio Valley, and Atlantic Coast States. Icing caused power outages in parts of the Southeast and middle Atlantic Coast States, and tornados ripped through parts of the lower Mississippi Valley. Later, rain and melting snow caused isolated flooding in parts of the middle and northern Atlantic Coast States. Despite the severe weather, most areas welcomed the precipitation as soil moisture levels improved.

In the Western United States, temperatures averaged above normal in most areas and well above normal through most of the Rocky Mountains. The snow pack continued to accumulate in the northern Rocky Mountains, but heavy rains and mild temperatures melted snow in the Pacific Northwest. The combination of heavy rain and snow melt caused flooding in low-lying areas along streams. High pressure temporarily forced storms to the north of the Pacific Northwest coastal areas, allowing soils to dry and streams to recede from their banks, but the system weakened and the rainy pattern resumed. Below-normal temperatures persisted in California's valleys, hindering growth of small grains, winter forages, vegetable crops, and emerging sugar beets. Excessive dryness during the first half of the month and excessive dampness during the second half also hindered growth. A brief early-month warm spell allowed citrus growers in the San Joaquin Valley to salvage some fruit from their orchards, but most of the navel orange crop that remained unharvested as the month began was damaged or destroyed. Picking of mature fruit continued in southern California. In vineyards and non-citrus fruit orchards, growers kept busy with pruning, weeding, and fertilizing chores until late- month rains hindered their efforts.

FORMER SOVIET UNION: WEATHER AND CROP DEVELOPMENTS

In January, overwintering conditions continued favorable for winter grains throughout most of the former USSR. Temperatures in January averaged 3 to 6 degrees C above normal in Ukraine, most of Russia, and Belarus. Monthly temperatures averaged 1 to 3 degrees C above normal in the Baltics. Snow cover in winter grain areas of the Ukraine and southern Russia (North Caucasus and lower Volga Valley) was patchy or nonexistent during January. However, temperatures in these areas were not low enough for a sufficient amount of time to threaten exposed crops. A moderate to deep snow cover persisted in winter grain areas of northern and central Russia during the month, protecting winter grains from periods of very cold weather. Above-normal precipitation fell in northern Russia, the Baltics, and central Ukraine during January, boosting potential moisture reserves. Winter grain areas in the remainder of Ukraine and southern Russia received below-normal precipitation in January. Since early February, unseasonably mild weather in Ukraine and southern Russia continued to provide favorable overwintering conditions for winter wheat. However, winter wheat areas in eastern Ukraine and the North Caucasus region in Russia lacked a protective snow cover, leaving them vulnerable to potential extreme cold. Although bitterly cold weather (minimum temperatures ranging from -20 to -35 degrees C) was observed in northern Russia, the Baltics, and Belarus, a moderate to deep snow cover protected winter grains from widespread winterkill.

Tom Puterbaugh (202) 720-2012

FEATURE COMMODITY ARTICLES

INDICATIONS FOR 1999/00 FOREIGN COTTON AREA

Foreign cotton area for the 1999/00 season depends on several factors with cotton prices and those of competing crops playing a crucial role. Domestic and world financial conditions also influence foreign cotton area along with government policies and weather. The Cotlook A-Index represents the price level of international raw cotton offered to the market on a daily basis from several cotton trading countries. Generally, a direct relationship exists between cotton area and this price index for the previous year. During the first six months of the1998/99 marketing year, the index dropped 12 cents. This factor alone suggests that foreign cotton area in 1999/00 may drop below the 28.5 million hectares estimated for 1998/99. However, area shifts also depend upon the price level of other crops in relation to the price of cotton, production costs associated with cotton production, and government policies.

Preliminary indications are that foreign cotton area in 1999/00 could range from 27.5 to 28.5 million hectares, compared with an estimated 28.5 million for 1998/99. The high end of the forecast range infers the impact of weaker prices for competing crops, potential favorable weather, and supportive government policies in several large producing countries. The low end of the forecast range considers the effect of weak crop prices, unfavorable weather, and financial problems.

Cotton prices also declined during 1997/98 due to excess production which outpaced consumption. The converse is true for 1998/99 as consumption fell more than production, resulting in a 17-cent decline in world prices from the same period a year earlier. The current drop in cotton prices is due both to a decline in consumption, precipitated by the East Asia economic crisis and to China's expected shift from a net importer to a net exporter this season.

China: The production outlook is mixed. The Chinese Government is working hard to bring down area and production: the Minister of Agriculture, announced that the target for reductions will be 3.5 million tons, nearly 4.0 million bales lower than 1998/99. The government hopes to achieve the reductions through a drop in the procurement price for cotton. Reductions in cotton output are expected to be the greatest in the Yellow River basin, where input costs are high and pest problems severe. Smaller reductions are expected in the Yangtze River Basin while none are planned in Xinjiang. As part of the effort to reduce cotton planted area, the Government has announced many reforms in cotton procurement policies. The most important of these reforms are the liberalization of cotton prices beginning in September 1999, and the liberalization of procurement. The liberalization will theoretically allow mills to purchase cotton directly from farmers in competition with the government's Cotton and Jute Corporation (C&J). However, many officials in both the national and provincial governments are pessimistic about the Government's ability to reduce planted area. Even at lower prices, cotton remains the best cash-earning crop for farmers in many parts of China. As for direct farm-to-mill purchase, C&J has an enormous advantage in cotton procurement experience, and a monopoly on cotton ginning facilities, extensive storage facilities, and a longstanding relationship with farmers.

Former Soviet Union (FSU): Cotton area for 1999/00 is forecast to remain near this year's 2.5 million hectares. As in the past, two opposing forces continue to influence the size of the cotton area: the Republics' need for hard currency through the sale of cotton and the area needed for increased food production to feed their growing populations. Uzbekistan is the FSU's largest cotton producer with production regulated by the Government. At present, the Government of Uzbekistan's long-term cotton production policy is to stabilize cotton area at 1.5 million hectares and to increase cotton output by planting higher yielding varieties. However, this method is becoming more difficult due to problems with basic production operations and inputs; including irrigation, weed and insect control, inadequate machinery, poor crop rotation practices, and perhaps most important--the continued widespread usage of low-quality seeds. Nevertheless, assuming a return to normal weather, lint production is forecast well above the 4.6 million bales of 1998/99's weather-reduced crop. Turkmenistan, the second largest producer in the FSU, has had difficulties in maintaining production in recent years. However, the Government has announced several new initiatives that may promote cotton production for 1999/00. The Government will pay half the costs for planting seed, chemical, fertilizer, and technical support services. Also, the Government is purchasing nearly US$20 million worth of small tractors for use throughout the country. The current cotton varieties will be replaced with those that are more resilient. The Government recently declared that farms will be limited to three-hectare plots, to facilitate better crop management. Given the return of normal weather, lint production is forecast above the 950,000 bales of this year's crop with area slightly above last year's 475,000 hectares.

Mexico: Cotton area for 1999/00 is forecast to be near 200,000 hectares, down slightly from 1998/99, and production is forecast below the 1.0 million bale crop of 1998/99. Accordingly, the string of increased production years may be broken because cotton growers are expected to face depressed prices due to sluggish domestic demand well into 1999/00. The effects of weak demand are exacerbated by competition from less expensive U.S. cotton, high production costs and insufficient government support. Local agricultural specialists are urging Mexican cotton growers to be conservative on their planting intentions as cotton growers' incomes are expected to fall in 1999/00. Given the current relatively low cotton prices to other crops, farmers are likely to move to alternative crops with less risk, such as corn and wheat.

Brazil: Cotton area for 1999/00 is estimated near 0.9 million hectares, up slightly from 1998/99. Brazilian cotton production could reach 2.0 million bales next season. Cotton production is likely to be stimulated by the devaluation of the Brazilian currency ("Real"). Domestic cotton is expected to become more competitive since the imported product will become more expensive. Increased domestic cotton prices in terms of the Real should attract center-west growers to plant more cotton. Although, cotton production costs --related to imported-input-based fertilizers and chemicals-- will increase in local currency, other production cost components such as labor are likely to remain the same. Growers net incomes are likely to be favorable, raising planting intentions for 1999/00.

Argentina: Area for the cotton crop in 1999/00 is forecast near 0.7 million hectares while production is forecast slightly lower than 1.4 million bales. However, area will ultimately depend on the development of international cotton prices and other alternative crops, particularly grains and oilseeds. If domestic cotton prices continue to be weak, planted area could fall as low as 0.6 million hectares. Area of 0.6 million hectares is probably the floor for the cotton complex which has made significant investments in cotton research and development in the past few years.

Paraguay: Planted area for 1998/99 is forecast at 150,000 hectares and with the current level of technical assistance and with better farming methods being used, yield is likely to increase from the 1998/99 level of more than 400 kilogram per hectare. Assuming average weather, production is forecast above the 250,000 bales for the current year. However, the cotton industry continues to struggle through differing policies and levels of support. Farmers are being supported by the cotton reactivation program, but expected continued tight availability of credit will likely limit area expansion for the 1999/00 crop. On the positive side, greater recognition by the government that the crop remains vital to the country's welfare, especially for the small farmer and rural areas, will support area expansion.

Pakistan: Cotton area for 1999/00 is forecast to be about 2.9 million hectares, unchanged from 1998/99 as decreasing returns for cotton production relative to competing crops, particularly sugarcane, make area expansion unlikely. Given the current low world prices and the strong demand from the domestic textile industry for imported cotton, producer profits for 1999/00 are not expected to recover from the 1998/99 season. This situation should hold area near the 1998/99 season's level. Some area shift is expected but will be limited by the planned wide-scale distribution of new insect and virus-tolerant cotton varieties in time for the 1999/00 planting season and the continued payment problems faced by sugarcane farmers. Assuming minor movement in area and a return to more-normal weather, production may recover slightly from the 6.9 million bale crop of 1998/99. Cotton yield is expected to average from 500 to 600 kilograms per hectare. This is based on increased planting of tolerant varieties, adequate fertilizer application and the availability of better quality pesticides.

India: Low prices, pest/disease problems, and adverse harvest weather (especially in northern India) have caused major financial setbacks to cotton producers in 1998/99. As a result, producers are expected to reduce 1999/00 cotton area to below the record 1998/99 of 9.2 million hectares. Assuming a timely monsoon and normal weather, outyear production is projected below 1998/99 estimated 13.0 million bales. Prices of popular cotton varieties have been 5 to 10 percent below last season's levels due to a recession in the Indian textile industry. Further price deterioration is expected as arrivals from central and southern India peak. Despite the early announcement of the 1998/99 export quota of 400,000 bales, exports have been negligible due to low international prices. Poor returns from the 1998/99 crop will particularly affect planting in northern India where farmers have suffered heavy financial losses due to two consecutive years of low yields caused by adverse weather and pests. The shift away from cotton is expected to be less pronounced in other regions where yields have been less affected by these problems.

Australia: Cotton area for 1999/00 is forecast to decrease to an estimated 475,000 hectares. Assuming average yields, lint production would reach 3.3 million bales. The outlook for 1999/00 cotton production is closely linked to water availability. Rainfall and the level of both on and off-farm water storage will be major factors in determining the area planted. Currently, the level of water in major dams that service the cotton industry is high. Historically, this indicates that water availability for the outyear irrigated cotton crop should be adequate. High returns to cotton compared to competing crops, high stock levels of irrigation water, and good soil moisture levels have resulted in record cotton area for the 1998/99 crop of 540,000 hectares. Irrigated cotton area is expected to increase marginally in 1999/00. The area sown to dryland cotton for the 1999/00 crop will depend on soil moisture at planting and given average seasonal conditions, will fall substantially, resulting in cotton area below the 1998/99 level. Cotton area potential is increasing throughout Australia. The Queensland Government has recently decided to build a new dam which in the medium term will boost irrigated area. While the Ord River Area in Western Australia has potential to increase Australia's cotton production, it is currently at the experimental stage and relies heavily on the development of suitable transgenic cotton for this area's agronomic conditions.

Turkey: The cotton area for 1999/00 is forecast to fall below the 1998/99 level of 750,000 hectares. The 1998/99 area increase is attributed to the continued profitability of cotton and the expansion of cotton area under the Southeastern Anatolian Project (GAP). While cotton area and production in the traditional growing regions have been decreasing due to farmers' dissatisfaction with cotton prices, ecological problems, and high cost of cotton farming, area expansion in the GAP had outpaced the decline. For the outyear, area growth in the GAP is expected to slow allowing the decline in the traditional regions to pull Turkey cotton area down. Domestic prices for the 1998/99 are at a historically low level due to lack of demand from the textile industry. The Turkish textile

industry is going through one of the worst crises of its history due to the downturn of its major export markets in Russia and Europe. Thus, cotton will likely lose ground to other crops, such as wheat, if prices do not improve.

Egypt: Cotton area for 1999/00 is forecast to decrease 30,000 hectares below this year's estimated 280,000 hectares with a projected output slightly below 1998/99 estimated 1.1 million bales. The outlook for 1999/00 cotton production is closely linked to government support and the performance of the previous year's crop. In 1998, cotton area declined to 281,400 hectares from 373,602 hectares due to the negative response of farmers to the government decision not to announce a minimum guaranteed floor price for the cotton crop in advance of planting. For the 1999 crop, the government has announced that it will provide funds for land preparation and some inputs, but the impact of these measures on area is uncertain. The outyear cotton area reduction is based in part on the low average return that farmers' earned in 1998/99 compared to previous seasons. In 1998/99, farmers received an average of nearly 25 percent less per unit of cotton lint than in 1997/98 and 1996/97. In addition, a substantial decrease in yield resulted from unfavorable weather conditions during the last part of growing season. The decrease in cotton farmers' earnings and limited governmental support is expected to have a negative impact on their 1999/00 planting decisions.

Ronald R. Roberson, Cotton Chairperson
Telephone: (202) 720-0879
E-mail: roberson@fas.usda.gov

TABLE: 20

Foreign Cotton: Area, Yield, and Production

1999/00 Forecast 27,500 to 28,500
*480-pound bales

NOTE: Information in this article is based on field reports received in early January 1999 from U. S. agricultural counselors and attaches, together with information from USDA Washington analysts. Actual area could vary from these estimates for a number of reasons, including government policy changes, weather during the crop season, and price changes for cotton and competing crops. The first official USDA forecast of total cotton production and area for 1999/00 will be issued in May 1999. Individual country estimates for area, yield, and production will be released in July 1999.

CORN PRODUCTION IN SELECTED COUNTRIES

This article will discuss the 1998/99 corn production prospects in the major corn producing countries that currently have crops growing -- Brazil, Argentina, South Africa, Zimbabwe, and Thailand. Argentina's corn crop is estimated below last season's record level, while corn production in Brazil, South Africa, Zimbabwe, and Thailand are projected higher than 1997/98. (See attached tables and charts)

Thailand: Corn production in Thailand for 1998/99 is estimated at 4.3 million tons, up 0.6 million or 16 percent from 1997/98. Harvested area is estimated at 1.2 million hectares, up 6 percent from last season due to relatively favorable corn prices before the main-season planting, a reduction of funds advanced by sugar mills to sugar cane farmers, and a shortage of cassava seedling stocks. Yield is estimated at record 3.74 tons per hectare, up 9 percent from last season's previous high. Average national yield is trending upward because of increased use of high yielding varieties, greater use of inputs, and favorable weather. Despite dry weather during a 3 to 4 week period in June and July, rains returned and boosted corn yield. Currently, most of the corn has been harvested although some of the second crop is still growing. This season's second crop production will be much lower than the previous year due to unfavorable prices at the time of planting and dry weather.

South Africa: Corn production in South Africa for 1998/99 is estimated at 9.0 million tons, up 1.5 million or 19 percent from last year. Harvested area is estimated at 3.2 million hectares, up about 0.2 million hectares from a year ago. White corn, used for human consumption, accounts for more than 60 percent of the total sown area, and the ratio of white corn to yellow corn increased in 1998/99 in response to more favorable prices for white corn vis-a-vis yellow corn. Corn yield is estimated at 2.81 tons per hectare, up 10 percent from last season.

The 1998/99 corn crop got off to a strong start. Warm temperatures and adequate soil moisture allowed farmers to plant corn in a timely manner, and heavy rainfall in November and December aided germination and vegetative growth. The 1998 La Niña episode has brought above-normal rainfall to most areas of South Africa. Unusually heavy rainfall in the northern part of the Maize Triangle caused some planting delays as well as water logging and disease problems in the region; however, thus far no serious yield losses are expected. Parts of Free State and North West Province reported below-normal rainfall in January, but moderate temperatures minimized the impact of the dryness and recent rains have eased the earlier season moisture deficit.

Zimbabwe: Zimbabwe's 1998/99 corn production is estimated at 1.9 million tons, up 27 percent from last year's below-normal crop. Area is estimated at 1.5 million hectares, up 18 percent from last year, as the end of El Niño and timely spring rainfall encouraged farmers to expand planted area. Corn yield is estimated at 1.31 tons per hectare, slightly above the 5-year average. Abundant rainfall at planting and throughout the growing season has resulted in mostly favorable conditions for Zimbabwe's summer crops. In northern Zimbabwe, unusually heavy rainfall in December and January caused some leaching and water logging, but the crop in central and southern Zimbabwe befitted from normal rainfall and seasonable temperatures. Several factors are weighing on crop production this year, including fertilizer shortages, high input costs, low commodity prices, and a controversial land redistribution program.

Brazil: Corn production in Brazil for 1998/99 is estimated at 33.5 million tons, up 2.5 million tons or 8 percent from last year. Harvested area is estimated at 12.7 million hectares, up 1.1 million hectares from 1997/98. El Niño-related drought reduced the 1997/98 second crop causing higher relative prices and spurred producers to increase the 1998/99 first-crop area. The first-crop accounts for over 85 percent of production and is planted during the period October through December with a February-June harvest. Important first-crop states include: Parana, Rio Grande do Sul, Minas Gerais, Santa Catarina, and Sao Paulo. The second-crop is planted during January-February and harvested during June-September. Important second-crop states include: Parana, Sao Paulo, Mato Grosso, Bahia, Mato Grosso do Sul and Goias. Rainfall during November through mid-January has been deficient in southern Brazil and adequate-to-above average elsewhere. The crop in Rio Grande do Sul suffered some damage due to dryness in December. Crop conditions have improved significantly since mid-January, with cumulative rainfall conditions near to above normal in many parts of the country. Corn yield is estimated at 2.64 tons per hectare, matching the record yield during the 1994/95 season.

Argentina: Corn production in Argentina for 1998/99 is estimated at 14.5 million tons, down 4.9 million or 25 percent from last year's record crop. Harvested area is estimated at 2.9 million hectares, 9 percent below last year. Timely rains in January and early February benefitted the corn crop, that just passed through the critical flowering stage. Cumulative rainfall through January has been normal to above normal in the key corn and soybean provinces of northern Buenos Aires, Cordoba and Entre Rios. Pockets of corn in the critical flowering stage remain dry in southern Buenos Aires near Tendil and Tres Arroyos; however, excessively wet conditions are prevalent in the northern provinces of Chaco and Formosa. Corn yield is estimated at 5.00 tons per hectare, down 18 percent from last year, but still at the second highest level.

Timothy Rocke, Grains Chairman
Telephone: (202) 720-1572
E-mail: rocke@fas.usda.gov

Paulette Sandene, Southern Africa Analyst
Telephone: (202) 720-0133
E-mail: sandene@fas.usda.gov

Rao Achutuni, Argentina, Brazil Analyst
Telephone: (202) 690-0140
E-mail: achutuni@fas.usda.gov