March 2000
FEATURE COMMODITY ARTICLES
World Rapeseed Production in 2000/01 Likely to Fall Below Record 1999/2000 Levels
World rapeseed production for 1999/2000 is estimated at a record 42.5 million tons, up 6.6 million or 19 percent from 1998/99. Strong demand, and favorable world prices relative to other crops at planting in most countries led to the surge in output. Favorable weather in most producing regions and varietal improvements also contributed to the record output. World rapeseed yield increased to 1.53 tons per hectare, up 9 percent from the previous year.
Prospects for the 2000/01 crop are mixed. Output will likely decline in Western Europe and Canada due largely to lower world prices. Increased vegetable oil imports are depressing domestic prices in India and may be a factor in reducing rapeseed output. Output may increase in China based on strong internal demand and changed agricultural policies. Low world rapeseed prices may affect Australian farmer’s decisions, and may reduce planted area and production there. The crop in the United States declined against a strong upward trend last season, but may increase this year if normal weather prevails.
China: China’s 1999/2000 rapeseed production was estimated at a record 9.8 million tons, up 18 percent from the poor crop in 1998/99. Estimated planted area reached a record 7.4 million hectares, as farmers responded to higher relative prices by switching from winter wheat to rapeseed. Yields were close to the 5-year average despite unfavorable dryness at planting and excessive rainfall during harvest.
Another record crop may be produced in 2000/01 based on increased planted area and normal yields. Planted area for the 2000/01 winter rapeseed crop increased significantly over last year’s record area. The domestic demand for oilseed products is strong, and prices are high in relation to winter grains. The Chinese government has eliminated support payments for the poor-quality winter wheat produced in central and southern China, and many farmers in the region have shifted to rapeseed instead. The 2000/01 crop was planted in Fall 1999 under near-normal moisture conditions. The weather during the winter of 1999/2000 was colder than the last two years, and there were reports of minor frost damage following outbreaks of unusually cold weather in January and February. Moderate rain and snow during the winter provided abundant moisture for the dormant rapeseed crop, current soil moisture levels are adequate to surplus, and the crop has started to emerge from dormancy in central China.
India: Rapeseed production for 1999/2000 is estimated at 5.7 million tons, up 16 percent from 4.9 million tons in 1998/99. The higher production this season is the result of relatively better weather conditions this season as compared to last year. During last season, Uttar Pradesh, the second largest rapeseed growing state, experienced widespread flooding in many regions. The cloudy and humid conditions created additional disease and insect pressure in the remaining crop areas. This season, growing conditions have been drier with more growing degree days accumulated throughout the October to March growing season.
India's oilseed yields are among the lowest in the world, as oilseeds are typically grown on marginal land and rain fed. Moreover, the use of high yielding varieties is negligible. While the development of water resources will require long-term investment, enactment of the Plant Variety Protection Act would encourage private development of high-yielding varieties, as well as provide farmers access to improved varieties already being used in other countries.
The declining area of oilseeds, including rapeseed, is a result of lower vegetable oil prices which have pressured crushing margins, and further softening oilseed prices to growers. If the oilseed prices do not recover, farmers are expected to reduce their oilseeds area in the coming year.
Canada: Rapeseed production for 1999/2000 is estimated at a record 8.8 million tons, up 16 percent from a year earlier. Crop yield is estimated at a record 1.58 tons per hectare. Favorable summer weather aided crop development and offset the delay caused by late planting. Excessive moisture during the spring caused substantial planting delays: southeast Saskatchewan and southwest Manitoba were the areas that had the most delays. More area may have been planted to rapeseed than producers originally intended because rapeseed needed less time to mature than wheat. Weather was cool and wet throughout the early summer, then changed to nearly ideal warmth and dryness in August. Crops in many areas of the prairies were two to four weeks behind normal development, causing concern that an early freeze would damage overall production. However, producers in the prairies benefitted because hard freezes held off until the average first-frost date in mid-September or thereafter. Areas in Saskatchewan and Manitoba that suffered the most delays received the latest hard freeze, which did not occur there until nearly October.
Rapeseed plantings are expected to be down in 2000/01 as producers who chose to plant rapeseed last season look to rotate their crops. The normal (recommended) field rotation for rapeseed is planting every four years in rotation with wheat (2 years) and barley/oats (1 year). If there were strong price expectations, producers might keep rapeseed in the same field for two or even three years at the risk of the crop developing fungal diseases. However, prices are expected to remain low this coming season in the face of large carry-over stocks and plentiful world supplies of palm and soybean oil. Agriculture Canada forecasts that the area seeded to rapeseed will drop 10.7 percent year-to-year.
In addition, yields are expected to decline from their record 1999/2000 level as it is unlikely that weather conditions will repeat last year's favorable combination of rainfall and temperature. The prairies have experienced a relatively dry winter so far, with parts of Alberta's rapeseed producing region registering dryer than normal soil moisture levels.
France: French 1999/2000 rapeseed production is estimated at a record 4.4 million tons, up 19 percent from 1998/99. Area harvested at 1.4 million hectares was also a record, up 19 percent from 1998/99. The increase in rapeseed area in 1999 across the European Union is due to relatively favorable prices at planting and the sharp growth in area planted to industrial rapeseed. A change in the European Union's Common Agricultural Policy (CAP) set-aside rate, from 5 percent in 1998 to 10 percent in 1999, led to the increase in industrial rapeseed. Land that has been placed in set-aside cannot be used for food production, but can be used for a crop destined for industrial use. Rapeseed is the most commonly chosen industrial oilseed crop. France also had an above-average yield of 3.26 tons per hectare for its rapeseed crop this year because of favorable weather conditions and varietal improvement.
Germany: German 1999/2000 rapeseed production is estimated at a record production of 4.2 million tons, up 22 percent from last year's 3.4 million ton harvest. Area harvested was a record 1.2 million hectares, up 19 percent from last season's 1.0 million hectares. Approximately 0.4 million hectares of the total area was planted to industrial rapeseed, which is used for diesel, hydraulic oils, and lubricants. Estimated yield for 1999/2000 was also a record at 3.46 million tons per hectare, following favorable weather during the growing season.
United Kingdom: Rapeseed production in 1999/2000 is estimated at a record 1.8 million tons, up 14 percent from 1998/99. Area harvested was estimated at a record 0.6 million hectares, up 5 percent from last season. Estimates place industrial rapeseed area at 15 to 20 percent of the total area planted to rapeseed. Yields were also favorable in the United Kingdom following good weather during the growing season.
Rapeseed plantings throughout the European Union are expected to be down in 2000/01 due to low world oilseed prices and another change in the CAP. A decline in the support prices for oilseeds relative to grains makes it more advantageous to grow grains this year. Therefore, producers are expected to shift area away from rapeseed and into wheat and other grains. Yields may also be down as soil moisture is slightly below normal as winter comes to a close, and weather was unusually favorable during last year's growing season.
Australia: Rapeseed production for 1999/2000 is estimated at a record 2.35 million tons, up 33 percent from 1.76 million tons in 1998/99. The higher production level this season is the result of a larger planted area. The 1999/2000 season saw a record 1.76 million hectares sown to rapeseed. This is a 38 percent, or 487,000 hectare increase over the 1998/1999 season record of 1.27 million hectares. This season’s cooler temperatures in New South Wales at season end boosted yields and oil content. South New South Wales had below average yields as a result of disease, and rain damage to late planted crops. The state of Western Australia saw the largest increase in both area planted and production, where production is estimated to be 1.0 million tons, 61 percent higher than last season. Weather conditions in Western Australia were mostly favorable, and oil content satisfactory.
The factors which will influence planted area for the 2000/2001 Australia rapeseed crop will be world prices, Australia dollar exchange rate, and returns relative to other crops. Continued low prices, the world rapeseed glut, and higher production cost compared to wheat will trim the rate of rapeseed area expansion in some regions. However, these factors will be balanced against the recently released results of an Australian agronomic study which reveal higher wheat yields result when rapeseed is included in the cropping rotation. In addition, at current price levels gross margins are higher with a wheat-rapeseed rotation as compared to a wheat-wheat rotation.
United States: The United States remains a minor producer of rapeseed, despite increased production in recent years. Rapeseed output increased 600 percent in 5 years to reach 710,000 tons in 1998/99. Output likely would have increased again in 1999/2000, except cool wet weather in the spring delayed planting in north central North Dakota and northern Minnesota where much of the crop is grown. Area harvested declined 3 percent in 1999/2000 to 424,000 hectares, while production declined 13 percent to 621,000 tons. In addition to cool wet conditions at planting, cool temperatures in the summer slowed crop development and delayed harvest progress. Output may increase in 2000/01 if weather conditions return to normal, while current low prices are not encouraging. Farm season-average-prices for rapeseed dropped from 11.3 cents per pound in 1997/98 to 9.1 cents in 1998/99 and are estimated at 7.5 cents for 1999/2000. The government loan rate, set at 9.3 cents per pound, may maintain farmer interest in growing the crop.
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Paul Provance, Oilseeds Chairperson
Telephone: (202) 720-0881
E-mail: provance@fas.usda.gov
Suzanne Miller, Canada and European Union Analyst
Telephone: (202) 720-0882
E-mail: millers@fas.usda.gov
Jim Crutchfield, Australia and India Analyst
Telephone: (202) 690-0135
E-mail: crutchfield@fas.usda.gov
Paulette Sandene, China Analyst
Telephone: (202) 690-0133
E-mail: sandene@fas.usda.gov
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