Australia: Conditions Remain Generally Favorable For Winter Grain Development
During August 1999, widespread showers benefitted vegetative winter crops throughout the west and southeast of Australia. Due to frequent weekly rainfall, winter grain conditions, for the most part in the southeast and west are favorable. The heaviest rains in this region, fell in sections of southern New South Wales and the lightest rainfall was recorded in the driest areas of northwestern Victoria and northern extreme growing area of southeast South Australia. In early September, wheat and barley are in the tillering stage- to-early jointing in the south and west and early maturation and harvest in northernmost growing areas of Queensland.
Argentina: Late August Rains Benefitted Germinating Wheat
During the week of August 22 - 28, 1999, much needed rain (5 - 20 millimeters) boosted topsoil moisture for germinating and vegetative wheat across the main wheat regions of central Argentina. Higher amounts (20 - 35 millimeters) fell in central Buenos Aires. But, little or no rain fell in La Pampa. Prior to this rainfall, dry weather prevailed across this area, causing concerns for a good start to the wheat growing season. Typically, the wheat growing areas of Argentina receive about 10 millimeters of rainfall per week during mid-August. Light to moderate rain (5 - 22 millimeters) fell again during the week of August 29 through September 4, providing beneficial moisture for germinating and vegetative wheat across the major wheat areas of southern Buenos Aires. Dry weather returned to southern Cordoba and southern Sante Fe, after the prior weeks beneficial rainfall. Rain is still needed for wheat germination and establishment in these areas. According to reports as of August 27, Argentine wheat planting was 98 percent complete, compared to 97 percent complete last year.
India: Drought Continues In The West
During August, 1999, the southwest monsoon continued to be unusually weak across Pakistan and northwestern India. As a result, unseasonable warmth and dryness worsened drought conditions over important oilseed, coarse grain, and cotton areas of western India. During the week of August 22 - 28, the dryness covered major growing areas from Pakistan and north-central India to Maharashstra, including soybean areas of western Madhya Pradesh. In addition, highs in the lower to middle 30's degrees C intensified crop stress and enhanced evaporative losses. Gujarat, a primary groundnut and cotton producer, has likely suffered the greatest losses in yield potential due to chronic lack of rainfall since mid-July. However, crops in neighboring states (Rajasthan, Madhya Pradesh, and Maharashtra) have also experienced periods of stress, requiring an immediate resumption in monsoon rainfall to avoid significant losses in summer production potential. On a positive note, showers brought additional relief to oilseed and cotton areas of Andhra Pradesh, improving crop prospects and boosting irrigation levels for winter production. During August 29 through September 4, hot, dry weather persisted over the western Indian state of Gujarat, placing additional stress on groundnuts and cotton. High temperatures reached the middle 30's degrees C on a daily basis, exacerbating the effects of the drought on moisture supplies. Drier-than-normal weather also continued over nearby locations in the northwest (Rajasthan, Punjab, and Haryana) and intensified over the southern interior (Maharashtra, Karnataka, Andhra Pradesh), threatening prospects of rainfed summer crops. However, highly beneficial, locally heavy rain brought some relief to the soybean belt of western MadhyaPradesh. In addition, showers maintained mostly favorable moisture levels for rice from central Madhya Pradesh eastward through Bangledesh and Indias eastern states. The southwest monsoon typically begins its seasonal withdrawal from the northwest during early September.
FEATURE COMMODITY ARTICLES
CHINA GRAIN SITUATION
China is expected to harvest another bumper grain crop in 1999/2000. Total grain (defined as wheat, corn, rough rice, miscellaneous grains, edible beans, and tubers) is forecast to exceed 500 million tons for the third time in four years. Total grain area is estimated down slightly, with reductions in corn and wheat area offsetting a slight increase in rice area. Despite a drought in parts of the North China Plain and excessive rainfall in central China, near-record yields are expected for rice and wheat, and corn yields are expected to be above average.
Successive bumper crops in the 1990's have answered critics who wondered if China would be able to produce enough grain to feed itself, but the achievement has come at a high cost to the Chinese government. To encourage farmers to expand grain production in the mid-1990's, China raised the procurement price for quota grain (which the farmer is obligated to sell to the Government) and promised to purchase, at a lower price, whatever surplus grain the farmers wanted to sell. Among the results of this policy were huge stocks of high-priced government-owned grain (including large amounts of poor quality wheat and early rice), high storage costs, larger post-harvest losses due to inadequate storage facilities, and a heavy burden of debt. China adjusted its grain policy in 1998 and 1999 to address some of these issues. In order to reduce excess stocks and cut costs, China lowered, or in some cases eliminated, both procurement prices and guaranteed purchase amounts. The Government also decided to place greater emphasis on improving the quality of grain output rather than increasing quantity. It has sharply lowered the purchase price for inferior types of wheat and early (indica) rice, while offering premium prices for higher-quality varieties of grain. These reforms could result in slightly lower production in 2000/2001, as farmers react to lower grain profits by using fewer inputs and reducing area. However, there are few alternative crops in many regions where surplus grain is grown, and the cost of switching to other crops can be high.
Chinas total wheat output for 1999/2000 is estimated at 115.0 million tons, up 5.0 million from last year, but down 8.3 million from the record set in 1997/98. Earlier this year, the Chinese government announced that 1999 summer grain output (85 to 88 percent winter wheat) reached 118.5 million tons, the second largest crop on record. Dry weather at planting led to a small reduction in winter wheat area, and a serious drought affected much of the crop on the North China Plain throughout the winter and spring. However, a combination of efficient crop management, supplemental irrigation, timely late-season rainfall and excellent harvest weather enabled farmers to achieve near-record winter wheat yields.
Production of spring wheat (10 to 11 percent of the total crop) is expected to drop by about 8 percent in 1999/2000 due to lower estimated area. The weather was generally favorable in the Northeast, although dryness may have affected yields in Inner Mongolia and northwest China. Heavy rainfall in mid-August (harvest period) likely caused minor yield and quality reductions in Heilongjiang. The Government is actively discouraging the production of spring wheat (used mainly as a feed grain) and area is likely to continue to drop.
China is expected to harvest 125.0 million tons of corn in 1999/2000, the third-largest crop in history. Area is estimated down slightly to 25.1 million hectares, as area reductions in some of the corn-surplus provinces in northern China were partially offset by increased area in the south and west. Yield is estimated at 4.98 tons per hectare, down about 5 percent from last years record yield. The weather was very favorable this year in the Northeast, where 38 - 40 percent of the crop is grown, although parts of Jilin and Liaoning were drier than normal and yields may have been affected. On the North China Plain (36 - 38 percent), summer rainfall was the lowest since 1982 and soil moisture levels, which were already depressed at the beginning of the summer, dropped to the lowest level in several years. The rainfall pattern in July 1999 was similar to 1997, when a serious drought caused a major reduction in corn yields. However, temperatures were milder in 1999 and the impact on corn yield was less severe than in 1997. Cloudiness and below-normal temperatures may have delayed corn development in southern China, a minor corn-producing region, and excessive rainfall in June and August caused some localized flood losses in the provinces bordering the Yangtze River.
Chinas 1999/2000 rice crop is estimated at 197.1 million tons, up 4.3 million from last years flood-impacted crop, but down 3.6 million from the record set in 1997/98. Total rice area is estimated up slightly from last year, with increased single and late rice area offsetting a reported 2 percent drop in early rice area. About half of Chinas rice production is single rice (which includes northern rice); the other half is divided roughly equally between early rice and late rice. Planted area for high-value northern rice (japonica) has increased sharply in recently years, while early rice area has been declining in response to lower prices. Early rice (indica) stocks are reportedly very high, and the Government has begun increasing the procurement prices for better varieties of middle and late rice in order to discourage early rice production.
The weather was generally favorable for the 1999/2000 early rice crop, and production is estimated higher than last year despite lower area. Excessive rainfall and local flooding in the lower Yangtze River Valley may have delayed the transplanting and development of single and late rice, but any crop losses this year were minor compared to 1998/99, when China experienced the worst flooding in decades. Heavy rain during the single rice harvest may have had an impact on yield and quality. Southern China has been cooler and cloudier than normal this summer, but seasonable rainfall has provided adequate moisture for the late rice crop and typhoon damage has been minimal. Late rice yields are expected to be very good.
Paulette Sandene, China Analyst
Telephone: (202) 690-0133
1999/2000 WORLD COARSE GRAIN PRODUCTION LOWEST SINCE 1995/96
World coarse grain (corn, barley, oats, sorghum, rye, millet, and mixed grains) production for 1999/2000 is forecast at 862.8 million tons, down 23.9 million from last year. This would be the smallest crops since 802.8 million tons were produced in 1995/96. Harvested area and yield are forecast to decline from last season to 301.0 million hectares and 2.87 tons per hectare, respectively. The United States is the worlds largest producer of coarse grains and is estimated to produce 261.8 million tons this year or about 30 percent of the global coarse grain output. World corn production is forecast at 591.8 million tons, down two percent from last seasons record level based on reduced yield. Barley, oats, rye, and sorghum production are all forecast lower than 1998/99. World barley production is forecast at its lowest level since 1970/71 at 127.7 million tons and world oats production is forecast at the lowest level on record at 24.9 million mainly due to smaller area. World sorghum and rye production are slightly below last season at 20.3 million tons and 59.7 million, respectively. Below is an analysis of corn, barley, and oats production prospects.
Corn: World corn production for 1999/2000 is forecast at a near record 591.8 million tons, down 11.0 million from last years record level; however, it virtually matches the second largest crop. Output has been trending higher in recent years due to increases in both area and yield. World corn area is estimated at the second highest on record at 138.7 million hectares, up marginally from last year, but down 2.3 million from the 1996/97 record of 141.0 million. World corn yield is forecast at 4.27 tons per hectare, down slightly from last seasons record level. In the United States, corn output is estimated at 238.3 million tons, down 9.7 million from 1998/99 due to a decrease in the projected harvested area and yield. (For the 1999/2000 season, the United States corn production represents 40 percent of world corn production and 63 percent of global corn exports). Yield is down 2 percent from last season at 8.30 tons per hectare. If realized, production would be the fourth largest, while yield would be the third highest on record. After a wet start, corn planting progressed rapidly in early- May, in fact, Iowa and Illinois planted half their corn in one week. Generally, favorable weather prevailed across the Corn Belt; however, hot, dry July weather temporarily deteriorated crop conditions, especially the southern and eastern parts of the Midwest.
In the EU-15, corn production is estimated at 35.8 million tons, up 1.3 million from last season, but below the 1997/98 record level of 38.5 million. Yield is estimated at 8.79 tons per hectare, up 4 percent from last year and the second highest on record. Harvested area is virtually unchanged from last year at 4.1 million hectares. In France, unseasonably warm, dry weather limited moisture for the corn crop -- production is estimated at 14.7 million tons. In Italy, favorable weather has boosted yield prospects to a record of 10.00 tons per hectare with production pegged at 10.0 million tons.
In China, corn production is estimated at 125.0 million tons, down 8.0 million from last season record level. Area is estimated marginally below last years record at 25.1 million hectares. Favorable early-season moisture gave way to dry weather across Shandong, southern Hubei, and northern Henan. However, yield continues to be strong at 4.98 tons per hectare due to supplemental irrigation, increased use of high yielding varieties, and favorable weather in the Northeast. In South Africa, corn production typically reflects the extreme variability in rainfall and temperature. Corn sowing begins in late-October and can extend into mid-January. For the 1999/2000 season, production is forecast at an average level of 8.0 million tons, up 0.9 million from last season. Area is forecast stable at 3.0 million hectares.
In Argentina, production is forecast at 15.5 million tons, up 2.0 million from 1998/99. Harvested area is estimated at 3.1 million hectares, up 22 percent from last years reduced level. Yield is projected at 5.00 tons per hectare, down from the record 6.10 tons of 1997/98 based on normal weather and less fertilizer usage. The crop will be planted starting in October.
In Eastern Europe, corn production is estimated at 25.6 million tons, up slightly from last year. Increases in production for Romania and Hungary more than offset a decrease in the former Yugoslavia. Generally, favorable weather benefitted corn yield potential this season. Romanias corn output is estimated at 9.0 million tons, up 0.5 million tons from last year; Hungary, 6.7 million tons, up 0.7 million from last season; the former Yugoslavia, 7.0 million tons, down 1.2 million tons from 1998/99, mainly due to a reduction in area.
In Mexico, corn production is estimated at a record 19.0 million tons, up 1.2 million from last season. Harvested area is estimated at 8.2 million hectares, up 0.3 million from 1998/99. A normal start of the summer monsoon favored crop development and partially replenished low reservoir levels, needed for irrigating the second corn crop. Yield is estimated at 2.32 tons per hectare, up 3 percent from last season, but marginally below the 1997/98 record of 2.35 tons.
Barley: World barley production for 1999/2000 is estimated at 127.7 million tons, down 9.3 million from last season and the lowest since 119.8 million was produced in 1970/71. Harvested area is estimated to fall to 55.8 million hectares, down 5.3 million from last season and the lowest on record (1960/61). Yield is estimated at 2.29 tons per hectare, slightly above last year and below the record 2.46 tons in 1990/91.
In the United States, barley output is down 20 percent from 1998/99 at 6.2 million tons. Harvested area declined to an estimated 2.0 million hectares, the smallest harvested since records were kept. Low prices for feed barley has caused farmers to switch to other crops or idle their land. Yield is estimated at 3.15 tons per hectare, down 2 percent from last season, but near the 5-year average.
In the FSU-12, barley output has fallen from 50.0 million tons in 1990/91 to an estimated 20.7 million in 1999/2000. Poor weather and continued economic troubles have plagued the crop again this season. Harvested area is estimated at 16.5 million hectares, down 1.6 million from last year due to decreases in Russia and Kazakhstan. Yield is estimated at 1.25 tons per hectare, up 16 percent from last season, but down 12 percent from the 5-year average. In Russia, production rose 1.7 million tons this year to an estimated 11.5 million tons as an increase in yield more than offset a decrease in area. Although output is higher year-to-year, production is still 36 percent below the 5-year average. Unfavorable hot, dry weather in the Volga Valley and surrounding regions caused spring barley production to fall. Normally, about half the barley crop is grown in the spring. In Ukraine, production is estimated at 6.0 million tons, up slightly from last years poor crop. Nearly all barley grown in Ukraine is spring barley. Below-normal precipitation and hot weather in the eastern and southern areas stressed barley and limited yield to 1.71 tons per hectare. In Kazakhstan, production dropped from 8.5 million tons to 0.8 million during the 1990/91 to 1999/2000 period. Production is down this season due to a further reduction in area as demand for barley continues to falter.
In Canada, production is estimated at 12.7 million tons, unchanged from last year. Weaker feed barley prices relative to other crops and wet planting conditions caused area to remain at a lower level. Although a wet spring delayed planting, cool and wet summer weather aided crop growth and boosted yield potential to 3.10 tons per hectare, the third largest on record.
In the EU-15, production is estimated at 48.6 million tons, down 3.5 million from 1998/99, while area declined 5 percent from last season to an estimated10.8 million hectares. Drought in Spain and variable weather in France reduced production prospects, but German barley output is projected higher than last season.
In Australia, production is estimated at 4.7 million tons, down 0.7 million from last year. A relatively poor outlook for barley prices caused producers to reduce area to 2.5 million hectares, down 0.5 million from 1998/99. This would be the lowest area in 5 years. Although there have been dry pockets, generally favorable weather has benefitted the crop and yield potential is estimated near an average of 1.88 tons per hectare.
Oats: World oat production for 1999/2000 is estimated at 24.9 million tons, down 0.9 million from last year and the lowest on record. As world demand for oats declines, area reaches a record low estimate of 14.3 million hectares. Yield is up slightly this season at 1.74 tons per hectare.
In the United States, production is estimated at 2.4 million tons, the third lowest on record. Continuing the long term trend, farmers may reap one of their smallest oat areas on record at 1.1 million hectares. Yield is estimated at an above-average 2.21 tons per hectare.
In the FSU-12, oat production is estimated at 6.1 million tons, virtually unchanged from 1998/99. Area has declined steadily from 10.4 million hectares to 5.5 million from 1990/91 - 1999/2000. Russia, the FSU's primary producer of oats, is estimated to produce 4.5 million tons in 1999/2000, nearly matching last year and down 7.8 million from 1990/91. Unfavorable weather throughout most of the growing season again this year has kept yield low at 1.00 tons per hectare.
In the EU-15, oat production is estimated at 6.2 million tons, nearly unchanged from 1998/99. Area is estimated at 1.8 million hectares, the lowest level on record. The reduction in area is due to agricultural policy reform and a continued slide in demand. With the exception of Finland where unseasonable dry weather reduced the crop, favorable weather across the EU-15 lifted yields above last seasons level to 3.38 tons per hectare.
In Canada, oat production is estimated at 3.6 million tons, down 0.4 million from last year due to a decline in area. High carryin stocks and lower prices dampened producers incentive to plant oats. Yield is estimated at a near average yield of 2.48 tons per hectare as the weather was cool and wet this season.
Timothy Rocke, Foreign Grains Production Chair
Telephone: (202) 720-1572
Maria Anulacion, Argentina Analyst
Telephone: (202) 690-0138
Paulette Sandene, China Analyst
Telephone: (202) 690-0133
Suzanne Miller, EU-15 Analyst
Telephone: (202) 720-0882
Bryan Purcell, East European Analyst
Telephone: (202) 690-0138
Mark Lindeman, FSU Analyst
Telephone: (202) 690-0143
Ron White, Mexico Analyst
Telephone: (202) 690-0137
Jim Crutchfield, Australia Analyst
Telephone: (202) 690-0135