March 1999

Weather Briefs

Argentina: Timely Rain Benefits Central Summer Crops.

Below-normal rainfall during the first half of January stressed developing summer crops in central Argentina. Timely rains during late-January and early-February replenished soil moisture reserves for vegetative to reproductive corn and soybeans. Again, dryness returned to the region during the second and third weeks of February negatively affecting crops. However, mid-February's dry and warm weather favored filling to maturing corn. Widespread soaking showers during February 28 through March 6 significantly benefitted summer crops in central Argentina, especially the second-crop soybeans currently in the reproductive stage. In Northern Argentina dry weather and warmer temperatures during most of February and early-March favored the maturing cotton crop.

Southern Brazil: Showers Slow Soybean Harvest

Above normal rainfall during early-January replenished soil moisture reserves for soybean development across much of southern Brazil. Rainfall was somewhat scanty in Rio Grande do Sul, however, this benefitted photosynthesis of the irrigated rice crop. Timely late-January and early-February rainfall improved soil moisture reserves, benefitting soybean development. Showers during mid-February favored reproductive to filling crops from Rio Grande do Sul northward into Parana and Sao Paulo. Mato Grosso do Sul and southern Mato Grosso reported lighter rainfall amounts. Showers, during February 14 - 20, covered parts of Rio Grande do Sul, Parana, and Sao Paulo, aiding reproductive to filling soybeans. Rainfall was somewhat scanty during this period in Mato Grosso do Sul, Mato Grosso, and Goias. From February 21 - 27, drier weather reduced soil moisture in Rio Grande do Sul. Elsewhere, showers maintained favorable soil moisture for filling soybeans. Recent rains benefitted pod-filling of soybeans in Rio Grande do Sul. Harvesting of soybeans has commenced and drier weather favored maturing soybeans in Parana. Elsewhere, heavy rainfall in Mato Grosso hampered harvesting operations.

South Africa: Hot, Dry Weather Gripped the Region

In January, rainfall was near to below normal across the corn belt of South Africa, with large sections of Free State and Mpumalanga reporting less than half normal rainfall. However, lower-than-normal temperatures and favorable long-term soil moisture reserves reduced the potential for stress on crops advancing through reproduction. Elsewhere, periods of heavy rain in KwaZulu-Natal and eastern sections of Western Cape favored summer crop development. Widespread, locally heavy showers during the week of February 14 - 20 benefitted reproductive to filling corn and other summer crops in chronically dry areas of the eastern corn belt of eastern Free State and Mpumalanga. Dry weather returned to the area during the week of February 21 - 27. From February 28 through March 6, dry and unusually hot weather gripped the region, stressing corn and other summer crops. Temperatures averaged 3 to 5 degrees C above normal across the corn belt, with highs hitting the middle 30's in many locations. These included important white corn areas of Free State and North West, and traditionally cooler locations in the far eastern corn belt. Rainfall was very sparse in the hottest areas, with just a few locations receiving more than 5 millimeters.

Production Briefs

China: SSB Releases Preliminary Estimtes for 1998

On February 28, 1999, the State Statistical Bureau (SSB) released its first official production estimates for selected 1998/99 crops. The report covered total grains, total oilseeds, peanuts, rapeseed and cotton. The SSB reported that China achieved a good harvest despite severe flooding in the Yangtze River Valley and unusually cool and wet weather in early summer, which led to reductions in winter wheat and early rice. These losses were partially offset by a bumper autumn harvest resulting from very favorable autumn weather and the increased use of high-yield crop varieties. The output of grain, cotton and rapeseed declined in 1998, while total oilseeds, and peanuts increased. The SSB will release a revised report on 1998/99 area and production in a few months. The final official estimates will be published in late summer.

China: Major Agricultural Products, 1998

Source: State Statistical Bureau

Brazil: Corn Lowered by Earlier Dryness in South

Brazil's 1998/99 corn crop is lowered by 1.0 million tons to 32.5 million, down 3 percent from last month, but up 5 percent from last season. Harvested area is lowered slightly to 12.6 million hectares, but is still 11 percent higher than 1997/98. Earlier dryness during planting and the beginning of the growing season reduced yield in the key producing states in the South, especially Rio Grande do Sul. In general, the corn harvest has been delayed by the late planting and in some areas, the need to reseed because of localized dry spells. As the soybean harvest nears, the corn harvest may be further delayed as producers move to harvest the soybean crop first. The Secretariat of Agriculture reported that as of February 22, 16 percent of the first-crop corn area in Parana had been harvested, while 23 percent of estimated second-crop area in Parana had been planted. The second season or safrinha crop is expected to do well due to favorable growing conditions in Parana.

South Africa: Corn Yields Reduced by Drought

Unfavorably hot and dry weather has led to a major reduction in South Africa's estimated 1998/99 corn crop this month. Production is estimated at 7.0 million tons, down 2.0 million or 22 percent from last month and down 7 percent from last year due to lower yield. On February 15, South Africa's National Crop Estimates Committee (NCEC) released its first production estimate for 1998/99 summer crops based on conditions to-date. Total corn output (commercial and non-commercial) was estimated at 7.7 million tons, close to the 1997/98 crop, but much lower than anticipated earlier in the season. The NCEC area estimate of 2.9 million hectares is up slightly from its initial estimate in January; however, it is lower than earlier forecasts by other analysts at the start of the planting season.

Soil moisture was adequate at planting, and above-normal rainfall through December led to expectations of high yields. Moisture conditions and temperatures continued favorable through mid-January, but the weather grew increasingly dry in February and March. Rainfall was 50 to 70 percent below normal in February, and unusually hot temperatures in late-February and March increased the impact of the dryness, particularly in the eastern Maize Triangle. Widespread rainfall is needed in March to prevent further yield losses.

Brazil: Rice Production Raised Due to Favorable Weather

Brazil's 1998/99 milled rice production is revised upward by 0.3 million tons to 7.5 million, up 4 percent from last month, but down 2 percent from the record 1994/95 crop. A majority of the main-season rice crop is cultivated in the State of Rio Grande do Sul and the November 1998 dryness did not damage the rice crop as the majority of the crop is irrigated. Supplies of irrigation water were ample because of the heavy "El Nino" rains during the previous season. Consequently, the periodic dry spells during the growing season actually benefitted yield by enhancing photosynthesis because of reduced cloud cover. In addition, new dryland rice varieties with yields approaching irrigated rice levels have increased average yields in the state of Mato Grosso and in the Center-West Region over the previous year. These varieties with very good quality characteristics are being heavily adopted, principally in Mato Grosso.

Mexico: Coarse Grain Estimate Reduced Due to Dryness

Mexico's 1998/99 corn production estimate is down this month from 18.0 million tons to 17.5 million, but is still up 3 percent from last year. Harvested area is lowered 0.1 million hectares to 7.6 million, while yield is down slightly. Sorghum output is estimated at 6.6 million tons, down 0.2 million from last month due to a reduction in yield, reflecting persistent dry conditions over the northern two-thirds of the country and low reservoir levels in key winter producting states.

Sinaloa, a major corn producing state for the fall/winter crop season, has significantly reduced reservoir levels in three important reservoirs in the Culiacan area resulting from the lack of rain during the last year in the central part of the state. As a result, corn output is expected to decline as farmers switch to dry beans or other crops because they use less water than corn.

Argentina: Soybean Production Estimated Higher

Argentina's 1998/99 soybean production is estimated at 19.2 million tons, up1.2 million or 7 percent from last month, and equal to last year's record crop. The estimated harvested area is revised upward by 0.3 million hectares to 7.4 million, due to an earlier shift by farmers from corn to soybeans. Rainfall during the second half of February was deficient in the southern parts of Cordoba, Santa Fe, and Buenos Aires. Soaking rains during the first week of March benefitted single-crop soybeans, now in the pod-fill stage, as well as second-crop soybeans which are in the pod-set stage. The estimated yield of 2.59 tons per hectare, the second highest on record, is down from 2.79 tons per hectare of last year. Additionally, the 1997/98 soybean crop is revised upward from 18.7 to 19.2 million tons based on reported stocks, exports, and crush data along with the assumption of normal amounts used for other uses such as seed and residual.

Brazil: Soybean Production Estimated Higher

Brazil's 1998/99 soybean crop is estimated as second highest on record at 31.0 million tons, up 0.5 million or 2 percent from last month, but down 2 percent from last year's record crop of 31.5 million tons. The estimated harvested area remains unchanged from last month at 12.8 million hectares. Recent rains improved prospects for the soybean crop in parts of Bahia, Parana, and Rio Grande do Sul. Above normal rainfall continues Mato Grosso, threatening harvesting operations. Nationally, 8 percent of the soybean crop has been harvested as of March 5. The state-wide harvest progress is as follows: Goias (18%), Mato Grosso (17%), Sao Paulo (12%), Parana (9%), and Mato Grosso do Sul (12%).

China: Record Peanut Crop in 1998/99

China's 1998/99 peanut crop is estimated at a record 11.7 million tons, up 1.5 million or 15 percent from last month and up 21 percent from last year's drought-impacted crop. Area is estimated at a record 4.1 million hectares, together with very good weather produced a record estimated yield of 2.85 tons per hectare. The changes reflect the latest estimate by China's State Statistical Bureau.

The weather was very favorable in 1998 for peanuts in the major peanut-producing North China Plain Provinces of Shandong, Henan, and Hebei. These provinces account for more than 60 percent of the total crop. Conditions were much better than in 1997, when the peanut crop on the North China Plain was reduced by drought. In Shandong, China's largest peanut producing province, a combination of higher area and excellent yields caused output to rise by an estimated 1 million tons over 1997/98. Very good yields were also expected for Guangdong and Guangxi in southern China, where peanuts are the largest oilseed crop.

The Ministry of Agriculture reports that returns on peanuts are slightly better than corn, and a planned reduction in cotton area on the North China Plain may encourage further increases in peanut area in 1999. Peanuts compete directly with cotton, corn, and soybeans on the North China Plain. Although the bumper crop in 1998 led to declining prices for peanuts and peanut products, they remain a popular and profitable alternative to corn and cotton.

United States: Crop Condition and Progress

Temperatures averaged above normal across most of the Nation during February. Only areas along the Pacific Coast and adjacent areas of the Rocky Mountains experienced below normal average temperatures. In the Pacific Northwest and points as far south as central California, storms repeatedly pounded coastal areas causing flooding, erosion, and mud slides. Farther inland, at higher elevations of the Cascade and Sierra Ranges, additional snow accumulations increased the risk of avalanches. Interior areas of the Rocky Mountains also received precipitation, but the area from the High Plains eastward into the northern Corn Belt and Great Lakes Region remained dry. Parts of the Corn Belt and adjacent areas of the Great Plains received beneficial precipitation.

The southern Plains experienced near-record temperatures early in the month that spurred small grain development, especially in the Texas High Plains. Growers began planting corn in the Coastal Bend to take advantage of available subsoil moisture supplies. As the month progressed, corn and sorghum planting gained momentum until a cold front temporarily deterred planting near mid-month. After warmer weather returned, winter wheat conditions improved in the southern Plains, but a shortage of soil moisture hindered growth, especially in Texas. During the last half of the month, corn, cotton, and sorghum planting progressed in central, southern, and coastal parts of the State with only brief isolated rain delays. Strong winds near the end of the month further depleted moisture supplies in already dry soils, but winter wheat fields remained green due to mild temperatures. As the end of the month approached, more winter wheat fields broke dormancy in the central and southern Great Plains, Mississippi Delta, and southern Corn Belt due to continued mild weather. Some early-planted corn and cotton emerged in Texas, despite dry soils and the brief mid-south cold spell.

In California, the rain, wet soils, and below-normal temperatures prevailed in northern areas most of the month. Field activities were frequently delayed, but did not hinder growth of small grains, alfalfa, forage crops, and sugarbeets. Where conditions were drier, producers applied herbicides, insecticides, and fertilizers; prepared soils for spring crops; replanted freeze-damaged sugar beet fields; and finished planting wheat. In southern California, citrus growers continued harvest activities. Despite below-normal temperatures, almonds and early peach and nectarine varieties began budding. Cotton planting began in the Imperial Valley near the end of the month.

In Florida, warm, dry weather aided sugarcane harvest and field preparations for spring crops; however, winter grains were stressed by moisture shortages. Near mid-month, a frost accompanied by strong winds caused some minor citrus leaf burn and bloom bud damage. Crews rapidly harvested the early- and mid-season orange crop. Vegetable growth was normal and quality was mostly good. Citrus groves need rain to sustain growth and healthy bloom-bud development.

Former Soviet Union: Weather and Crop Developments

In February, overwintering conditions continued mostly favorable for winter grains in Russia, Ukraine, Belarus, and the Baltics. Above-normal precipitation fell in Russia, Ukraine, Belarus, and the Baltics in February, boosting potential moisture reserves. More than twice the normal amount of moisture fell in the Volga Valley region in Russia. In early February, bitter cold extended from the Baltics and Belarus eastward across northern Russia. Although minimum temperatures (-17 to -40 degrees C) exceeded the threshold for potential winterkill, a sufficient snow cover protected winter grains from widespread damage. During February 4-5, the bitterly cold air briefly edged southward into major winter wheat producing areas of eastern Ukraine and the North Caucasus region in Russia. In areas that lacked a protective snow cover, extreme cold was of short duration, minimizing the potential for crop damage. On February 13, a warming trend began in most areas and continued until month's end, improving overwintering conditions for winter grains. During the latter half of February, a series of storms spread moderate to heavy snow over western Ukraine, the Baltics, Belarus, and northern Russia, further increasing the deep snow cover. The snow cover in northern Russia has persisted over unfrozen soils during the entire winter, increasing the likelihood for fungal development. Since early March, unseasonably warm weather continued to prevail over most areas. A lack of snow cover and generally dry weather in southern Ukraine and the North Caucasus region in Russia favored early season fieldwork, including early spring planting and fertilizer applications. However, the mild weather caused winter grains to lose cold hardiness, leaving them highly susceptible to potential extreme cold.

Tom Puterbaugh (202) 720-2012

Feature Commodity Articles

South America Trip Report

Foreign Agricultural Service analysts from the United States Department of Agriculture traveled to Brazil, Paraguay, and Argentina during January and February 1999 to assess the soybean and sunflower crops, and gauge trends in oilseed production. The emphasis in Brazil was to gauge expansion into the Center-West; in Paraguay, to assess production increases in the last few years; and in Argentina, to assess the status of the current crop.

Brazil: Brazil's current soybean crop is in excellent condition and estimated at 31.0 million tons, down 2 percent from last year's record level. Originally, there were worries about the crop due to a November drought which caused some delays in planting. However, in December when rains increased, planting was completed, and precipitation since has been abundant in most growing areas. SEE CHART 1

Fertilizer purchases this year are very similar to 1997/98, despite low commodity prices faced at planting time. Industry representatives in Mato Grosso voiced the opinion that fertilizer use for soybeans is down this season because of delays in obtaining financing to plant the crop, and that the fertilizer used was applied at the last minute. They felt total fertilizer use is the same as last year as fertilizer was diverted to other crops, particularly cotton which requires a higher level of inputs. Cotton area is up in Mato Grosso, but down nationally.

The state of Mato Grosso, is currently seeing the development of multiple shipping alternatives for their soybean crop which may encourage the continued expansion of soybean production. The area of greatest expansion of soybean production in Brazil is the Cerrado, a savanna region which includes parts of Mato Grosso, Mato Grosso do Sul, Goias, Distrito Federal, Rondonia, Bahia, Maranhao, Piaui, Tocantins, Minas Gerais, and touches into Amazonas.

Mato Grosso currently produces about 22 percent of Brazil's 30.5 million ton soybean crop. In previous years, soybeans had to be shipped by truck over poor roads approximately 1800 kilometers to Southeastern ports or domestic consumers. That route still carries most of Mato Grosso soybeans out of the state, but four alternative routes now or soon will exist.

A barge facility exists at Porto Velho on the Madiera River in Western Rondonia. Soybeans are shipped by barge down the Madiera to the port of Itacoatiara on the Amazon River and transferred to Panamax ships capable of carrying 55,000 tons. In 1996/97, its first year, the Porto Velho facility handled 300,000 tons; in 1997/98, it handled 600,000 tons; and this season, it is expected to handle 900,000 tons. This route can save US$30 per ton in shipping costs out of Northwestern Mato Grosso.

Stretching north from Cuiaba, the capital of Mato Grosso, to Santarem on the Amazon River is a 1700 kilometer road. Santarem is a port capable of handling cape size vessels able to carry 100,000 tons. The road from Cuiaba to Santarem is expected to be paved next year, greatly facilitating the export of soybeans from northern Mato Grosso to Europe.

Within two years, it is expected that a privately built railroad will reach Rondonopolis in southeastern Mato Grosso and will connect to Sao Simao on the Paranalba River. There, soybeans can be transferred to barges and floated to points just west of Sao Paulo. This route could potentially reduce the cost of shipping soybeans out of Rondonopolis in eastern Mato Grosso by US$35 per ton.

Some soybeans are now being shipped by barge from Caceres in western Mato Grosso, down the Paraguay River to Argentina and Uruguay. The river is fairly shallow with portions having swift running water. Furthermore, dredging on the river is not likely to occur because it could drain the Pantanal, a large wetland area. Despite the problems, growth in the use of this waterway is expected.

The total size of the Cerrado is estimated at 207 million hectares, 136 million which could be developed for crop production. Forty-seven million hectares are already in use, leaving 89 million hectares available for further expansion.

Paraguay: During a visit to eastern Paraguay on February 1, the status of the soybean crop was very good. Production is estimated at 3.1 million tons, up 4 percent from 1997/98. The Paraguay crop had good rains during flowering in January, and subsoil moisture conditions were adequate, but a few rains were still needed to complete pod filling. It was reported that the very first of the harvest had begun. Since the trip, precipitation has been variable with totals approximately 60 percent of normal. SEE CHART 2

Industry representatives confirmed that the national soybean yield has gone up dramatically in recent years. The soybean area in eastern Paraguay borders the Brazilian state of Parana, and a great deal of new technology has been brought across the border and is increasing the yield in Paraguay as well as Brazil. Paraguay's 1998/99 soybean yield is forecast at a record 2.58 tons per hectare, up from 2.49 last year. This compares with 2.60 and 2.55 tons per hectare respectively for soybean yield in Parana. Soybean area in Paraguay is 1.2 million hectares and has remained at that level for two years. Further area expansion will be hampered by government restrictions against cutting trees for the development of crop land.

Argentina: In Argentina, the focus of the trip was on the current soybean and sunflower crops. Industry and government sources in Buenos Aires reported that soybean and sunflower crops were generally in good condition because plentiful rains occurred in the main growing areas of northern Buenos Aires and Santa Fe. Argentine soybean production for 1998/99 is estimated at 19.2 million tons tying the record set last year on a record area of 7.4 million hectares and bumper yield. The sunflower crop is forecast at a record 6.7 million tons on record area of 3.8 million hectares and near average yield. SEE CHART 3

Drought occurred in southern Buenos Aires Province early in the season with some areas still dry as of early February. Also, some dry areas occurred in northern sunflower and soybean growing regions near Rosario.

Temperatures were cooler than normal, so even where moderate dryness occurred, the crop condition was good. Also of note, an unusual frost occurred in South Central Buenos Aires on January 10; compared with the normal last frost date of September 20. This frost is thought to have caused some damage to the sunflower crop, but the true extent of the damage will not be known until harvest.

An important reason for the record area estimated for soybeans and sunflowers is the low prices of wheat and corn. Additionally, dryness at planting in some areas caused a shift to soybeans. Soybean yield will benefit because area planted to wheat this season was down. The percentage of second-crop soybeans (soybeans planted after wheat) is down this year and yield for the second-crop soybeans are generally lower than the main-season crop.

Paul Provance, Oilseeds Chairperson
Telephone: (202) 720-0882
E-mail: provance@fas.usda.gov

North Korea Grain Situation

North Korea is a poor, mountainous country with a small amount of productive farmland. A cool, continental climate limits the amount of grain and other food crops it can produce. Food shortages were suspected in North Korea in the 1980's, but the situation grew more serious in the 1990's following several years of unfavorable weather and economic decline. (See satellite imagery of North Korea.)

Grain Production in North Korea - 1998/99:

USDA estimates North Korea's 1998/99 total grain production at 3.4 million tons, up about 10 percent from 1997/98's drought-reduced crop. The total includes 1.4 million tons of milled rice (2.0 million rough basis), 1.9 million tons of corn, and 100,000 tons of wheat and barley. Rainfall and temperatures were mostly favorable during the growing season, although late-summer rainstorms and typhoons caused some crop losses along the west coast. South Korea sources estimate the crop at 3.9 to 4.0 million tons (beans and potatoes included), while the North Korea Government places the 1998/99 grain crop at 2.8 million tons. With the average grain consumption level just under 5.0 million tons, there is a grain deficit of nearly 1.6 million this season which must be met through commercial purchases or donations.

Arable Land is Limited, Yields are Low: According to North Korea government statistics, North Korea has about 12.3 million hectares of land, but only 1.9 million hectares (15 percent) are arable. The rest of the land is covered with forests (60 percent) or used for other purposes (25 percent). About 600,000 hectares are planted with rice, 600,000 hectares with corn, and 700,000 hectares with vegetables, fruits, and other crops (wheat, barley, potatoes, legumes, and oilseeds). Nearly all suitable land is now being cultivated, so any increase in crop production will have to come from higher yields. Current yields are low compared to other nearby countries. Rice yields in North Korea have averaged 3.62 tons per hectare over the last 10 years, much lower than South Korea's rice yield of 6.22 tons per hectare. Corn yields averaged 3.21 tons per hectare, well below China's estimated average yield of 4.68 tons per hectare. For decades, North Korea concentrated on growing corn and rice to the near-exclusion of other grains, but efforts are now underway to increase output of wheat and barley by expanding double-crop area. The Government, in cooperation with international aid agencies, is also promoting the cultivation of summer barley, vegetables, and especially potatoes as a way to increase food output and improve crop diversity.

Grain Shortages in North Korea: Nearly a decade of declining grain production has led to grain shortages in North Korea. Grain supplies are low throughout the country, but especially in northern and eastern provinces. The grain situation is slightly better on the west coast, along the border with China, and near the capital of Pyongyang where the land is more productive and transportation is more efficient. For many years the North Korea Government rationed grain through an efficient public food distribution system, but as grain supplies declined the Government gradually reduced the size of the ration or halted distribution altogether. The World Food Program recently reported that all the grain from the 1998/99 harvest will be distributed by early April, and the country will have to rely on donated grain or alternative crops until the next harvest. Aid officials report that some North Koreans have resorted to eating grasses, bark, sea weed and corn cobs to satisfy their hunger, even though these products have no nutritive value. Food shortages have led to serious medical problems in North Korea, according to a nutritional survey conducted by UN agencies in 1998. The survey found that 62 percent of children under 7 were malnourished and 65 percent had stunted growth and retarded development. It also found that mortality from diseases is increasing due to poor sanitation, contaminated water, medicine shortages, and declining health infrastructure.

International Response: North Korea's food shortages first became evident to the world in 1995, when the Government appealed to the international community for aid.

Nearly $1 billion of food aid and economic assistance has been provided to North Korea in the past three years and the country will likely require food assistance from the international community for several more years. The UN and international aid groups are working with the North Korea Government to help end its dependence on food aid. By providing fertilizer, better seeds, new crops, modern farm techniques, and repairs to the irrigation system damaged by floods in 1995 and 1996, they hope to raise grain output to 4.8 million tons in 1999 and reach self-sufficiency by 2001.
___________________
Paulette Sandene, Korea Analyst
Telephone: (202) 690-0133
E-mail: sandene@fas.usda.gov

Last modified: Thursday, December 11, 2003