July 2000

PRODUCTION BRIEFS

China: Lower Area Cuts 2000/01 Corn Crop

China’s corn production for 2000/01 is estimated at 122.0 million tons, down 3.0 million or 2 percent from last month and down 5 percent from last year due to lower expected area and yield. Corn area is estimated at 24.5 million hectares, down 0.5 million from last month. The revised corn yield of 4.98 MT/Ha is close to the 5-year average and sightly higher than last year. Unfavorably hot and dry weather stressed the corn crop in the Northeast and the North China Plain last month, but the critical period for yields is July and August.

Corn area declined in 2000/01 in response to high stock levels, low market and procurement prices, and local government policies that encouraged soybean production. The largest reductions were in the Northeast, where nearly 500,000 hectares were reportedly switched from corn to soybeans. Corn area was also reported lower in the North China Plain, with area shifting to oilseeds or cash crops. These losses were partially offset by increased early corn area in southern and central China, where it was planted as an alternative to early rice and wheat. The weather for planting was favorable in the Northeast (30 percent of total corn area), but persistent hot and dry weather since May has stressed vegetative corn and soybeans. Recent showers provided only limited relief, and more rain is needed support the mostly rain-fed crops. On the North China Plain (30 percent of total corn area), drought in May and June stressed spring-sown crops and delayed summer crop planting, but heavy rain since July 1 has reduced the moisture deficit and improved yield prospects. Southern and western China (21 percent of total corn area) have been generally wetter than normal since June 1.

Canada: Wheat Production Forecast Rises as Barley and Corn Fall

Canada's 2000/01 wheat production is estimated at 26.0 million tons, up 1.5 million from last month but down 3 percent from last year. Estimated harvested area rose 0.5 million hectares from last month to 11.0 million hectares, up 6 percent from last year. The area change reflects the June Statistics Canada Acreage Report, showing farmers chose to plant more wheat than anticipated in the March Statistics Canada Intentions Report. Roughly one third of the additional area is durum, largely due to strong prices for quality durum during the past two years. Many farmers planted wheat in lieu of rapeseed this season, as record rapeseed stocks remaining from last year's record harvest are still depressing prices. The additional wheat area also reflects this month’s drop in forecast barley area from the March intentions.

Barley production is estimated at 14.5 million tons in 2000/01, down 0.5 million tons from last month, but up 10 percent from last year as estimated area fell from 5.0 million hectares to 4.8 this month. Barley area is expected to be up almost 18 percent over last year due to favorable market demand, especially for malting barley. However, farmers trimmed their plantings from early intentions, possibly because of reports of increased plantings in Australia and the United States.

Corn production in 2000/01 is estimated at 9.0 million tons, down 1.2 million from last month and down 0.1 million from last year. Area fell from 1.3 million hectares last month to a still record level of 1.2 million this month. The strong boost in area results from greater demand for feed and industrial use. Area would likely have been higher, but excessive rainfall throughout the spring in Ontario and Quebec where the largest amount of corn is grown prevented fieldwork early in the season. As a result, many farmers opted to plant soybeans because of the shorter required growing season.

Romania: Crops Continue to Suffer from Excessive Heat and Minimal Moisture

Romania’s wheat crop is estimated at 3.3 million tons, down 1.2 million from last month and 1.5 million from last year. Area is also down150,000 hectares from last month but unchanged from 1999/2000. The barley crop is forecast down 22 percent to 700,000 tons with an area drop of 13 percent from June. Barley production is down 31 percent from 1999/2000. Corn production is estimated at 7.5 million tons, down 3.0 million from June and 3.0 million from last year. Area is estimated at 2.8 million hectares, down 13 percent from the 3.2 million estimate in June and down 200,000 hectares from 1999/2000. Romania’s 2000/01 summer crops continue to wither from the combined effects of a prolonged drought and a searing heat wave with temperatures reaching up to 38^o C. Meanwhile, a reduced wheat harvest is underway. The Ministry of Agriculture announced that 40 percent of all crop area is affected by severe drought conditions, particularly in areas along the Danube River in the south. Difficulties began during late winter as a lack of moisture stressed developing fall-planted crops. Between mid-April and early July, barely any rainfall was received and temperatures were significantly and consistently above average. Romania’s irrigation system is in disrepair and has been of little benefit.

Argentina: Soybean Production Up While Sunflowerseed Declines

Argentina’s 2000/01 soybean production is forecast to increase to a new record of 21.5 million tons, up 0.8 million tons or 4 percent from last season. After another successful season, the upward trend in soybean production is expected to continue with rising area driving production higher. A record area of 8.8 million hectares is forecast which is 3 percent higher than last season. Additional area is expected to be taken from sunflowerseed and possibly new areas brought under cultivation. Also, an increase in second-crop soybeans will likely accompany the increased wheat area this season. The 1999/00 soybean production estimate was revised this month to 20.7 million tons, down 0.3 million ton or 1 percent reduction from last month, to account for losses due to heavy rainfall during harvest in April and May. The excess moisture reduced yields and quality in the affected areas of southern Santa Fe, northern Buenos Aires and Entre Rios. Harvest of the 1999/00 crop is essentially complete according to a July 7 government report.

Sunflowerseed production is forecast to decrease in 2000/01 to 5.5 million tons, down 0.7 million or 11 percent from last season. Area is forecast at 3.1 million hectares, down 13 percent from last season. At this time, a year-to-year decrease in area is expected because of declining prices on the local market. However, the market situation when planting begins (August-September) will be the determining factor. Some production is expected to move west and north into drier areas leaving traditional sunflowerseed-production areas available for more profitable soybeans and wheat. The 1999/2000 crop is revised to 6.2 million tons, down 0.2 million tons or 3 percent from last month.

China: 2000/01 Soybean Output Up 11 Percent From Last Year

China’s 2000/01 soybean output is estimated at 15.8 million tons, up 1.5 million or 11 percent from last year. Soybean area is estimated at 9.3 million hectares, up 14 percent from last year. The area increase in 2000/01 was in response to higher prices, strong domestic demand for soybean products, and government policies that encouraged soybean production. The largest increases were in the Northeast, where about 500,000 hectares were reportedly switched from corn to soybeans this year. A reduction in spring wheat area also opened up land for soybean expansion. Soybean area was also reported higher in other provinces in northern and central China. Estimated yield of 1.7 tons per hectare is lower than the 5-year average due to drought in the Northeast.

The weather for planting was favorable in the Northeast (45 percent of total soybean area), but persistent hot and dry weather since May has stressed vegetative corn and soybeans. Recent showers provided only limited relief, and more rain is needed to support the mostly rain-fed crop. On the North China Plain (20 - 25 percent), drought in May and June stressed spring-sown crops and delayed summer crop planting, but heavy rain since July 1 has reduced the moisture deficit and improved yield prospects. Central China (15 percent) has adequate to excessive moisture for soybean development.

In the 1980's, soybeans were the major crop in the Northeast, with area and production reaching their peak in the early 1990's. Excessive stocks and falling prices led to a lower planted area in 1999/2000 and a major expansion of corn area in the Northeast. Soybean prices started to rebound in 2000, and the government offered incentives to crushers to use more soybeans and boost demand. Provincial grain bureaus have auctioned off excess soybean stocks to meet the rising demand and free-up storage space for the new crop. A Chinese Government proposal to lower the Value Added Tax (VAT) on imported soybean meal as of June 15 was postponed due to objections from producers and crushers who feared their profits would decrease.

India: Record Wheat Harvest Despite Severe Drought in Western And Central Areas

The Government of India revised the production estimate for the 2000/01 wheat crop to a new record of 74 million tons. An expected decline in drought affected Gujarat and Rajasthan was reportedly offset by higher production in the other producing states. Wheat regions across northern and most of central India experienced favorably cool weather and abundant sunshine during much of February and March resulting in higher yields. Rainfall and the availability of irrigation were adequate during critical growth stages in most of the irrigated areas. Harvesting conditions were ideal through May with temperatures hovering above 100 degrees Fahrenheit and no rain. There were relatively few reports of lodging this season and Ministry of Agriculture reported test weights higher than a year ago.

EU-15: Wheat Production Boosted by Favorable Weather

Total EU-15 wheat production is forecast at 107.1 million tons for 2000/01, up 1 percent from last month and up 11 percent from last year. Wheat area is up strongly throughout the EU-15 this year due to changes in the Common Agricultural Policy that make it more advantageous for farmers to grow grains over oilseeds. This month’s rise of 1.1 million tons is due to increasing yields, largely in Spain, where the estimated wheat harvest rose 1.0 million tons this month. The crop estimate for Portugal also rose this month, as the Iberian Peninsula experienced extremely beneficial rainfall during the spring and early summer. However, rain has continued through the harvest, and quality is believed to have suffered. In the rest of the EU-15, France continues to have a very favorable year while Austria and parts of eastern Germany have a rainfall deficit, drawing down yields there.

Brazil: Rising Soybean Production Expected, Despite Strong Cotton and Corn Prices

The 2000/01 soybean crop is forecasted at 32.8 million tons, up by 4 percent from last year’s crop. Harvested area is currently forecast at 13.4 million hectares, up by just 1 percent from last year. The potential for soybean expanded area will be hampered by expectations for good domestic cotton and corn prices next season. Overall, the outlook for the 2000/01 crop calls for a nearly steady area with the potential for a return to more normal yields throughout the country. Much depends upon the outcome of the crop in the southern state of Mato Grosso do Sul, which has had three consecutive drought years with low yields. Better than expected yields in Mato Grosso, and Bahia boosted soybean production during the 1999/2000 crop season and made up for production losses elsewhere in the country.

Vietnam: Record Rice Crop Expected in 1999/2000

Rice production in 1999/2000 is forecast to be 20.9 million tons, up 2 percent from last month and up 4 percent from last year. The winter-spring crop is the main crop in Vietnam, and the recently completed 1999/2000 harvest was a record for this crop. Area was slightly higher than originally forecast, and weather conditions were very good for rice this year. Rice crops in Vietnam have been steadily trending upward for the past decade. Vietnam has three rice crops a year: the first crop of the season is the 10^th month (rainy season) crop, followed by the winter-spring crop and then the summer-autumn crop.

Russia: Winter Wheat Yield Prospects Rise, but Decline for Spring Wheat

Russia’s 2000/01 wheat production is estimated at 34.0 million tons, up 1.0 million or 3 percent from last month, and up 3 million or 10 percent from last year. Area is estimated at 23.6 million hectares, up 0.1 million (less than one percent) from last month, and up 0.6 million or 3 percent from last year. Yield prospects improved in the winter-wheat region of European Russia because of continued favorable weather. However, in the spring-wheat region east of the Volga Valley, weather-related planting delays could have a negative impact on yield potential.

Ukraine: Wheat Output down Due to Drought in the South

Wheat production in Ukraine for 2000/01 is estimated at 12.0 million tons, down 1.0 million or 8 percent from last month, and down 1.5 million or 11 percent from last year. Area is estimated at 5.6 million hectares, down 0.2 million or 3 percent from last month, and down 0.3 million or 5 percent from last year. Winter wheat suffered from persistent dryness during establishment last fall, and throughout the spring and early summer, in the southern region. Compounding the negative impact of dryness on potential yield is the continued inadequate application of fertilizers and pesticides.

Pakistan: Wheat Production Up, Despite Widespread Drought Conditions

The Ministry of Food, Agriculture and Livestock has revised Pakistan’s MY 2000/01 wheat production forecast to 21 million tons, based on better-than-expected yields in the major wheat-growing areas of the Punjab. Initially, the forecast had been lower due to erratic irrigation supplies in the Sindh, but this occurred mostly at the end of the growing season and the effect on yields was minimal. The Punjab region received adequate irrigation supplies and temperatures remained mild throughout the growing season. Farmers in the Punjab reported record yield increases of 20 percent and higher above last year’s levels as a resulting from a number of factors, including timely planting, higher seeding rates, increased input usage and nearly ideal weather. Harvesting conditions were nearly ideal through May with temperatures near 100 degrees Fahrenheit and no rain.

Argentina: Wheat Production Higher on Increased Area and Normal Weather

Wheat production in Argentina for 2000/01 is forecast at 15.5 million tons, up 0.5 million tons or 3 percent from last month and last year’s production. Area is forecast at 6.1 million hectares, up 0.1 million from last month and 0.2 million or 3 percent from last year. The Argentine Government recently increased its forecast of planting intentions to 6.26 million hectares, 3 percent above last year’s planted area. Yield is forecast at 2.54 MT/ha, equivalent to last year. The beginning of the season has been wetter than normal except in southern Buenos Aires where rainfall has been close to normal. Average temperatures have been normal to slightly above normal throughout the wheat-growing region. Surface soil moisture for germination and establishment is adequate throughout the wheat region. Excessive moisture in parts of La Pampa and northwestern and eastern Buenos Aires has caused some planting delays. A July 7 government report indicated 57.5 percent of the area has been planted, lagging behind last season’s 67 percent and behind the average of 61 percent planted by this time. Planting is generally completed in August.

Uzbekistan: Wheat Yield Benefits from Increase in Irrigated Area

Uzbekistan’s 2000/01 wheat output is estimated at 4.0 million tons, up 1.0 million or 33 percent from last month, and up 0.4 million or 11 percent from last year. Area is estimated at 1.3 million hectares, unchanged from last month and last year. With grain harvest roughly half complete, officials reported indicate that output is up 0.5 million tons from the same date last year. According to officials, the area under irrigation increased by a reported 50,000 hectares this year. Roughly 75 percent of the wheat area is irrigated.

Foreign: Rapeseed Production Down Sharply

Total foreign rapeseed output for 2000/01 is estimated at 38.7 million tons, down 3.1 million or 8 percent from 1999/2000. Canadian output alone is forecast down 1.6 million tons or 18 percent as large stocks and low prices at planting induced farmers to seed less area. Rapeseed output in the European Union is forecast down 1.4 million tons or 12 percent as Agenda 2000 reforms diminish the differential in EU payments between oilseeds and grains. Eastern European production is forecast 0.6 million tons or 23 percent lower due to lower world rapeseed prices and spring drought which is cutting yield. China production, on the other hand, is estimated up 0.9 million tons or 9 percent as domestic stock levels and government policies have favored oilseed production in lieu of winter wheat and early rice.

Eastern Europe: Drought and Weak Prices Hit Oilseed Production

Total Eastern European oilseed production in 2000/01 is forecast to fall 1.2 million tons or 20 percent, while harvested area is forecast to fall 0.5 million hectares, or 13 percent from last season. The rapeseed crop has been severely reduced by springtime dryness, while the summer crops of sunflower and soybeans continue to wither from the combined effects of a severe drought and a searing heat wave. According to reports, Bulgaria’s capital, Sofia recently recorded its highest temperature ever, while temperatures have reached 42 ^oC in Serbia. Weather difficulties began during late winter with a lack of moisture in the Balkans. Since mid-April, barely any rainfall has been received there, and temperatures have been significantly and consistently above average. Poland, the Czech Republic, and Slovakia have fared somewhat better, where rainfall has approached 70 percent of normal in some locals.

The significant reduction in area can be attributed to low prices being offered at the beginning of the season after the collection of a bumper crop in 1999/2000. Polish rapeseed production is forecast down 29 percent to 0.8 million tons. Although a much smaller crop, Poland’s spring rapeseed seems to have been hit harder by the drought than the winter crop. Additional, but smaller, rapeseed reductions are estimated for the Czech Republic and Slovakia. Hungary’s sunflowerseed production is estimated to drop 31 percent from last year’s near-record crop as more area was planted to grain. Yugoslavia’s sunflowerseed production is forecast down 17 percent to 0.3 million tons, and Bulgaria’s sunflowerseed production is estimated down 18 percent to 0.5 million tons. Romanian sunflowerseed production is forecast down 9 percent from last year to 1.0 million tons.

China: Cotton Production Nearly Flat From Last Year as High Price Hold Area

China’s 2000/01 cotton output is estimated at 17.5 million bales (3.81 million tons), down 0.1 million or less than 1 percent from the 1999/2000 crop. Area is estimated at 3.75 million hectares, up slightly from last year’s record-low area. The estimated yield of 1016 KG/Ha is above the 5-year average but lower than last year’s record yield due to unfavorably dry weather in many cotton-producing provinces.

Cotton area dropped significantly in 1999/2000 in response to low procurement prices and government policies intended to reduce excess cotton stocks. Area was expected to drop in 2000/01 for the same reasons, and planting intentions were initially as low as 3.3 to 3.4 million hectares. However, rising cotton prices in Spring 2000 and increased consumption in recent months led farmers to plant more cotton than anticipated. The latest area survey by the National Bureau of Statistics indicated that spring-sown cotton area increased by about 60,000 hectares from a year ago. The Ministry of Agriculture and local officials also reported that cotton area would be similar to last year.

Growing conditions for the 2000/01 cotton crop have been mixed. In Xinjiang, where about 1/3 of China’s cotton is produced, the weather has been better than last year. The Post reported that farmers are having minor problems with insects, but the impact on yields is not expected to be serious. On the North China Plain, drought conditions in May and June stressed spring-sown cotton and delayed summer cotton planting, but heavy rain since July 1 has reduced the moisture deficit and improved yield prospects. Central China has adequate to excessive moisture for cotton development.

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