May 2000

PRODUCTION BRIEFS

2000/01

Northwest Africa: Crops Reduced by Drought

Morocco, Algeria, and Tunisia’s 2000/01 wheat and barley crops are much reduced from last year due to drought. For Morocco and Algeria, this is the second consecutive drought year and is more severe this season. Morocco is forecast to produce only 1.2 million tons of wheat, down from 2.1 million last season. Barley is forecast at 0.6 million versus 1.4 million last season. For Algeria, wheat is forecast at 0.6 million tons and barley 0.2 million. Rains were near normal early in the season, but abruptly stopped in January. USDA field travel in Morocco revealed that many crops withered and died before heading. In Tunisia, hot humid weather late in the season caused wheat production to fall to 0.8 million tons, down from 1.4 million in 1999/2000. Barley output is reduced to only 0.1 million tons. Total wheat and barley for the three countries is forecast at 3.4 million tons, down from 7.4 million last year and a record high of 17.4 million in 1996/97.

Argentina: Corn Production Increases, Wheat Unchanged

Corn production in Argentina is forecast to increase in 2000/01 to 16.5 million tons, up 1.0 million or 6 percent from a year earlier. Area is expected to increase 3 percent to 3.2 million hectares. Dry conditions at the beginning of last season delayed planting and resulted in planted area below original intentions. Dryness also reduced yield in some growing areas. Yield for the 1999/2000 crop which is currently being harvested (53 percent as of May 4) is expected to equal the five-year average of 5.00 tons per hectare. A slightly higher yield of 5.16 tons per hectare is expected in 2000/01 assuming normal weather.

The 2000/01 wheat production is forecasted to equal last season’s 15.0 million tons. Area is forecast to increase 3 percent to 6.0 million hectares. The increase of 0.2 million hectares is projected to be taken from area previously planted to oilseed crops. Reduced areas for some oilseeds are expected following a season of lower returns.

Canada: Wheat Crop Falls, Coarse Grain Up

Canada is forecast to produce 24.5 million tons of wheat in 2000/01, down 9 percent from last year’s harvest. Wheat area is forecast to be up slightly at 10.5 million hectares, as a significant increase in durum wheat is expected to more than offset a decrease in spring wheat. Canadian coarse grains are expected to reach 29.6 million tons, up 10 percent from last year, while coarse grain area is forecast to rise 8 percent to 8.1 million hectares. Barley is forecast to be at its highest level in almost 20 years, and corn area is expected to be a record high. Producers are choosing barley over wheat this year because of strong malting barley prices and strong demand for animal feed from the expanding livestock sector. Corn area is forecast at a record level as result of animal feed demand.

European Union: Wheat Forecast at Record; Coarse Grain Increases

The European Union (EU) is forecast to produce a record 106.2 million tons of wheat in 2000/01, up 9 percent from last year. Wheat area is forecast to be up 6 percent from 1999/2000 at 18.1 million hectares. Yields are forecast to rise marginally due to increased planting in several of the large, higher-yielding countries. Coarse grains are forecast to reach 106.9 million tons, up 4 percent from last year, while coarse grain area is forecast to increase slightly to 19.2 million hectares. Producers are forecast to plant grains at the expense of oilseeds this season. Oilseed plantings throughout the European Union are expected to be down in 2000/01 due to lower world prices and more attractive prospective returns for grains versus oilseeds.

Iran: Wheat Production Slashed Due to Drought

Iran’s 2000/01 wheat production is forecast at 7.5 million tons, down 1.0 million or 12 percent from last season due to the second consecutive year of drought. Reservoir levels and rivers are low, thus limiting the availability of water to irrigate the crops. Normally, about 70 percent of the wheat crop is irrigated. The satellite imagery-derived Normalized Difference of Vegetative Index (NDVI), which shows the vegetation vigor (greenness), indicates that current production potential is worse than last year for most of the country.

China: Wheat and Corn Production Lower Due to Area Decline

China’s corn production for 2000/01 is forecast at 125.0 million tons, down 3.0 million or 2 percent from last year’s near-record crop. Area is estimated at 25.0 million hectares, down 0.8 million or 3 percent from a year ago. The largest area reduction is occurring in the Northeast, where lower prices and government policies have encouraged farmers to switch from corn to soybeans this year. The planting season for early corn in southern China started in March, but the majority of the crop will be planted in northern China during May and June. Moisture and temperature conditions in the Northeast are favorable for planting, and recent rainfall has eased dry conditions on the North China Plain, which has been very dry this spring. Yield is forecast at 5.00 tons per hectare, slightly higher than the 1999/2000 crop. China’s 2000/01 wheat crop is forecast to drop by 7 percent to 107.0 million tons due to a large reduction in planted area and lower yield. Wheat area is projected to decline by 5 percent to 27.5 million hectares, the lowest level since 1974, in response to low prices and government policies to discourage the planting of low-quality winter wheat in southern provinces and spring wheat in the north. The largest area reductions occurred in the provinces near the Yangtze River, where farmers switched primarily to winter rapeseed. Yield is estimated at 3.89 tons per hectare, down 2 percent from last year’s large crop, but higher than the 5-year average.

Planting conditions in Fall 1999 for the 2000/01 winter wheat crop were mostly favorable, with near-normal rainfall and warm temperatures. The crop entered dormancy in good condition. Although the winter was unseasonably cold, especially in late January, there were no reports of winterkill. The weather was mild in February, but the North China Plain became increasingly dry from mid-March through early May. Soil moisture levels dropped steadily and non-irrigated crops were stressed, especially in southern and western wheat areas. Recent showers have improved moisture conditions slightly on the North China Plain, but more rain is needed through May. Spring wheat planting is underway and weather conditions are normal.

Pakistan: Wheat at Record Area, But Dry Conditions Tempers Yield

Pakistan wheat production for 2000/01 is estimated at 18.0 million metric tons, down 0.7 million from last season’s record 18.7 million. Area is estimated at a record 8.5 million hectares, up 0.2 million from last season. Area planted has increased given the Government of Pakistan's 25 percent boost in wheat procurement price for this growing season to Rs. 7,500 (about $145) per metric ton. Close to 80 percent of Pakistan’s wheat is irrigated; however, prospects for a strong harvest have dimmed during the season as dry conditions persisted. Rainfall in the growing region was below normal from January to the end of March, and cool temperatures resulted in less runoff from mountain snow pack melt, reducing irrigation supplies during the critical crop pollination stage (February through mid-March). While preliminary information indicates that yield will be average to slightly below average, total production prospects are balanced by an increase in area. Harvest in Sindh began in mid-March. Punjab harvest typically begins during April, but this season's cooler temperatures may cause minor delays.

Russia and Ukraine Grain Forecast Higher, Kazakstan Lower

Russia’s production of all major grains for 2000/01 is projected to increase from last year, based on slight increases in forecast area and yield. Wheat output is estimated at 33.0 million tons (up from 31.0 million last year), barley at 13.0 (10.6) million, rye at 5.5 (4.8) million, oats at 5.0 (4.4) million, and corn at 2.0 (1.1) million. Winter grains benefitted from favorable establishment and over-wintering conditions. Despite alarms expressed by agricultural officials regarding potential fuel shortages, spring planting is proceeding at a normal pace. Reports from the U.S. agricultural office in Moscow indicate that supplies of fertilizers and plant-protection chemicals are up from last year.

Ukraine’s production prospects for 2000/01 are only slightly better than last season. Ukraine wheat production is forecast at 14.0 million tons, up only 0.5 million from last year, when production fell to the lowest level in nearly thirty years. Because of persistent dryness during winter-grain establishment last fall, a significant portion of the wheat required replanting, and another year of inadequate application of fertilizers and pesticides will hamper yield potential. Barley production is forecast to fall to 5.5 million tons, from 6.4 million last year, because of drops in sown area and estimated yield. Corn production is estimated to increase to 2.5 million tons from 1.7 million last year, when severe drought drove corn output to a 5-year low.

Kazakstan’s weather was nearly ideal for grains last year, and wheat production skyrocketed to an estimated 11.2 million tons. Output for 2000/01 is forecast at 7.0 million, with area up 3 percent to 9.0 million hectares. Yield is forecast at 0.78 tons per hectare, slightly above the average of the past five years but down sharply from last year’s near-record 1.28 tons per hectare. Barley production is estimated at 1.6 million tons, down from 2.3 million last year. Estimated area is up 0.1 million hectares, to 1.8 million.

India: Wheat Area Reduced, Slows Production Growth

India wheat production for 2000/01 is estimated at 70.0 million tons, down 0.8 million from last season’s record 70.8 million. Area is estimated at 26.5 million hectares, down 0.9 million from last year’s record 27.4 million due to dry conditions at planting in Rajasthan and Gujarat. India’s 2000/01 winter grain season has been characterized by generally good conditions, with precipitation levels generally more favorable than last year and cooler-than-average temperatures in the main producing areas. Satellite derived vegetation indexes indicate a delayed crop compared to last season as result of the cooler weather. The majority of India’s wheat planting took place during the optimal planting period (mid-October to mid-December). About 80 percent of India's wheat crop receives some irrigation, with irrigation facilities concentrated in the larger producing states. Favorable conditions in the major grain belt (irrigated), partially offset the drier conditions that have prevailed in the rain-dependent marginal growing areas of Rajasthan, Gujarat, and Madhya Pradesh.

United States and Foreign Countries: Oilseed Production to Rise

World total oilseed production for 2000/01 is forecast at 310.0 million tons, up 12.2 million or 4 percent from 1999/2000. The U.S. crop is expected to account for much of the change as output here is forecast up 9.5 million tons to 91.6 million. Meanwhile, total foreign output is forecast up 2.6 million to 218.4 million. A large supply of palm oil has depressed vegetable oil prices on the world market, but improving economic conditions in Asia have resulted in improved demand for soybean meal. Output of high oil content oilseeds, namely sunflowerseed and rapeseed, may be down in 2000/01 while soybean output may increase. Palm kernel output is likely to be up based on tree plantings in earlier years, while copra is recovering from El Nino related dryness of 1997 and 1998. Cottonseed output will likely be down based on lower cotton plantings.

World: Cotton Production Falls on Foreign Sector Output

World cotton production for 2000/01 is forecast at 86.0 million bales, down 1.3 million or 1.5 percent from 1999/2000 as the expected larger U.S. crop fails to offset a drop in foreign cotton output. Preliminary forecast suggest a 5 percent drop in foreign production to 67.0 million bales, down 3.3 million or 5 percent from 1999/2000. Foreign area is likely to fall as international prices, although rising, remain below last year’s and the most recent three-year average. In addition, a return to normal yields in central and south central Asia is anticipated to reduce production there. This drop in foreign production more than offsets an estimated 12 percent rise in U.S. output to 19.0 million bales for 2000/01.

1999/2000

Brazil: Corn and Rice Production Raised Due to Favorable Weather

Brazil’s 1999/2000 corn production is estimated at 33.0 million tons, up 1.0 million or 3 percent over last month and 2 percent above last year. Harvested area is at 12.5 million hectares, up 1 percent from last month. The first corn crop, which typically accounts for about 80 - 85 percent of the total production, was adversely impacted by the earlier drought in the southern states of Mato Grosso do Sul, Rio Grande do Sul, western Parana and Santa Catarina. However, the affect on total corn production is mitigated by larger area and extremely favorable weather conditions in Mato Grosso, Goias, Minas Gerais, Bahia, and the Northeast. Recent field travel by USDA’s Agricultural Counselor office in Brasilia indicate a strong safrinha (second) corn crop due to an area increase in Parana and favorable weather.

Brazil’s 1999/2000 rice production, on a milled basis, is estimated at 7.4 million tons, up 2 percent from last month, but 4 percent below last year’s crop. The harvested area is currently estimated at 3.6 million hectares, unchanged from last month, but about 3 percent below last year’s crop. The major rice producing areas in Brazil include Rio Grande do Sul (44%), North/Northeast Region (24%), Mato Grosso (10%), Santa Catarina (8%), Minas Gerais (4%), and Goias (3%). The growing season was characterized by a drought during planting and early vegetative stages in the southern states of Parana, Santa Catarina and Rio Grande do Sul. However, much of the rice crop in the key state of Rio Grande do Sul is irrigated and did not suffer any significant damage. Generally favorable weather conditions elsewhere in Brazil benefitted rice crop production.

Bangladesh: Rice Harvest at Record Level

The 1999/2000 rice crop is estimated at a record 21.5 million tons (milled basis), up 1.3 million from last month and up 1.7 million from last season or 8 percent above last year’s bumper harvest. The harvested area forecast increased to 10.7 million hectares. Favorable weather, adequate input supplies at competitive prices and increased area contributed to this season’s large production increase. All three rice crops (aus, aman, and boro) showed gains over last season. The boro (spring-harvested) crop especially benefitted from abundant winter precipitation. Both the boro and aman (winter-harvested) crops registered increased area. Weakened domestic prices have fallen below the cost of imports, while the impact of consecutive favorable rice harvests has lowered import projections.

Burma: Rice Production up Following Good Rainfall

Burma is estimated to equal the record 9.9 million tons of rice (milled basis) in 1999/2000, up 3 percent or 0.3 million tons from last month’s estimate. Harvested area in Burma is unchanged from last month at 5.8 million hectares. Area has expanded throughout the 1990s because of government programs to bring fallow and virgin land into production. The increased area is mainly in the Irrawaddy, Rangoon, and Pegu divisions, and is used to grow wet season rice. Farmers on the new land are allowed to plant any crop they want during the dry season, and usually chose to plant a non-rice crop such as pulses. Both wet and dry season crops yields suffer from inferior seed quality, a shortage of inputs, and the high cost of inputs when they are available. Yields are estimated to be slightly above average based on favorable rainfall throughout the main wet season, expansion of hybrid varieties, and a government order to increase plant population per hectare.

Brazil: Favorable Rainfall Boosts Soybean Production

The 1999/2000 soybean crop is estimated at 31.0 million metric tons, up 2 percent from last month, but down 1 percent from last year’s crop. Harvested area is currently estimated at 13.3 million hectares, up 3 percent from last year. As of May 5, nearly 93 percent of the crop was reported harvested, compared to the 5-year average of 96 percent. With record yields, the state of Mato Grosso has surpassed Parana this season as Brazil’s leading producer of soybeans. The state of Bahia has registered a 9 percent increase in harvested area. Rainfall during the 1999/2000 growing season was extremely favorable in Mato Grosso, Goias and Bahia, significantly boosting crop yields. Collectively, these three states have more than made up for drought related production losses in Mato Grosso do Sul, Sao Paulo, Parana, Santa Catarina, and Rio Grande do Sul. Drought related production losses in Parana and Rio Grande do Sul are reported to be around a million tons.

India: Rapeseed Production Decreases Due to Drought

Indian rapeseed production for 1999/2000 is forecast to be 5.3 million tons. While this is a reduction of 0.4 million tons from last month’s forecast, it remains 0.4 million increase over last year’s production of 4.9 million. The 1999/2000 harvested area is estimated at 6.4 million hectares, down 0.3 million hectares from the five-year average of 6.7 million. Reduced production is a result of persistent dry conditions in the main rapeseed regions during the October-April growing season. The states of Gujarat and Rajasthan typically account for 52% of rapeseed production and have experienced dry conditions since last fall.

Despite being heavily irrigated (Gujarat 98 percent and Rajasthan 73 percent), the weak 1998/99 monsoon resulted in low irrigation supplies. Coupled with low winter rainfall, the ensuing drought conditions in the western and central growing regions have lowered both rainfed and irrigated rapeseed yield potential.

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