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USDA World Agricultural Production

09 May 2014

USDA World Agricultural Production - 9 May 2014USDA World Agricultural Production - 9 May 2014

USDA World Agricultural Production

European Union Rapeseed: Output Forecast at Near-Record Level

The 2014/15 European Union (EU) rapeseed crop is forecast at 21.5 million tons, up 0.3 million or 1.6 percent from last year, and 1.0 million tons above the 5-year average. Harvested area is estimated at 6.85 million hectares, up marginally from last year but 2.4 percent above the 5-year average. Yield is estimated at 3.14 metric tons per hectare (MT/Ha), above last year’s 3.11 MT/Ha and the 5-year average of 3.06 MT/Ha. The records levels are 7.0 million hectares in 2010/11, 3.37 MT/Ha in 2004/05, and 21.6 million tons in 2009/10.

Weather conditions for the planting of the 2014/15 winter rapeseed crop were more favorable than last season, which enabled farmers to sow more area to rapeseed in Romania, Hungary, and France. Area is estimated to increase by 45 percent in Romania, by 14 percent in Hungary, and by 6 percent in France. An exceptionally mild winter benefited crop development, with crops breaking dormancy up to a month earlier than normal. Little or no winterkill was reported. Cooler temperatures in mid-April have slowed crop growth to some degree, but development remains about two weeks ahead of normal. Dryness has been a concern in the main rapeseedproducing countries in central Europe, including Germany (the EU’s number-one producer), Poland, and the Czech Republic (both in the top five). During late April and early May, beneficial rainfall fell throughout Europe. While still more rainfall is in need, concerns about dryness have been greatly reduced.

In the United Kingdom (another EU top-five rapeseed producer), yields for 2014/15 are forecast to be up 16 percent from last year, when a wet autumn forced some farmers to sow loweryielding spring rape rather than higher-yielding winter rape. Similarly improved yield is forecast for France, the EU’s second-largest producer. (For more information, please contact Bryan Purcell at 202-690-0138202-690-0138.)

Canada Rapeseed: Area Seeded Forecast to Drop

USDA forecasts 2014/15 Canada rapeseed production at 15.4 million tons, down 14 percent from last year. Area is estimated at 7.85 million hectares, down 1.9 percent from 2013. Yield is forecast slightly above trend at 1.96 tons per hectare, down 13 percent from last year’s record 2.25 tons per hectare.

This is the second straight year that farmers are seeding less rapeseed. Statistics Canada’s March bulletin Intentions of Principal Field Crops reported that farmers plan to seed 8.01 million hectares of rapeseed, a slight decrease from last year. The decrease in area seeded is attributed to record carry-over stock from last year’s record harvest. Planted area in Saskatchewan (which accounts for about 50 percent of the country’s total rapeseed production) is expected to decrease by nearly 2 percent, while planted area in Alberta (30 percent) is expected to increase by 1.6 percent. Planted area in Manitoba (20 percent) is expected to match last year’s level.

Provincial governments are forecasting a late start to planting due to cool and wet conditions. Planting conditions characteristically improve in the later part of May. (For more information, please contact Arnella Trent 202.720.0881202.720.0881.)

Ukraine Wheat: Average Output Forecast

USDA forecasts Ukraine wheat production for 2014/15 at 20.0 million tons, down 2.3 million from last year but slightly above the 5-year average of 19.6 million. Harvested area is estimated at 6.3 million hectares against 6.6 million last year. The year-to-year decrease in area reflects a 5-percent drop in the area planted to wheat last fall. The Hydromet Center of Ukraine reports that the winter-wheat crop (which accounts for nearly all of the country’s total wheat output) is in very good condition. Satellite-derived vegetative indices indicate that winter-crop conditions as of April 30 are the best since 2008. Winter crops benefited from outstanding fall establishment conditions and low winter losses. Despite the excellent current conditions, USDA forecasts that yield will drop from last year’s level due to a likely reduction in the spring application of mineral fertilizers and a reduction in the use of herbicides and other agricultural chemicals. Yield is forecast at 3.17 tons per hectare, down 6.4 percent from last year but 3.6 percent above the 5-year average. (For more information, please contact Mark Lindeman at 202-690-0143202-690-0143.)

Middle East Wheat: Winter Grains Drought Affected Areas

Turkey Wheat: Drought and late freeze in the Anatolia region unfavorable

USDA forecasts Turkey’s 2014/15 wheat production at 15.0 million tons, down 3.0 million or 17 percent from last year. Harvested area is forecast at 7.7 million hectares, almost no change from last year. Yield is estimated at 1.95 tons per hectare (MT/Ha), down 0.39 MT/Ha from last year. Turkey reported late wheat germination in the Cukurova and Central Anatolia regions due to low soil moisture. Persistent dry weather and then a freeze in early April over the Anatolia plateau when the crop was in early flowering have been the primary factors leading to the decrease in forecasted production. (For more information, please contact Bill Baker at 202- 690-8109202- 690-8109.)

Syria Wheat: Severe drought along western winter grains significantly impacts production

USDA forecasts Syria’s 2014/15 wheat production at 2.5 million tons, down 1.5 million or 38 percent from last year. Harvested area is forecast at 1.3 million hectares, down 0.3 million hectares or 16 percent from last year. Yield is estimated at 1.92 tons per hectare (MT/Ha), down 0.79 MT/Ha from last year. Syria is experiencing a continued drought along the western grains region with the province of Aleppo being the hardest impacted. However, the wheat crop in the Northeast Al Hasakah region, which produces 36 percent of the total winter grains, has been much less affected due to more favorable precipitation. (For more information, please contact Bill Baker at 202-690-8109202-690-8109.)

Iraq Wheat: Favorable national precipitation allows for above average forecast

USDA forecasts Iraq’s 2014/15 wheat production at 3.5 million tons, up 0.2 million tons or 6.1 percent from last year. Harvested area is forecast at 2.46 million hectares, down 0.1 million hectares or 4.1 percent from last year. Yield is estimated at 1.42 tons per hectare (MT/Ha), up from 1.29 MT/Ha last year. Wheat production in Iraq is forecast above last year’s record production. High government support prices that encouraged an increase in planting combined with favorable nation-wide winter precipitation has Iraq is on target to produce an aboveaverage crop. (For more information, please contact Bill Baker at 202-690-8109202-690-8109.)

Iran Wheat: Drought in key northeastern winter grains region

USDA forecasts Iran’s 2014/15 wheat production at 13.0 million tons, down 1.5 million tons or 10 percent from last year. Harvested area is forecast at 6.8 million hectares, down 0.2 million or 2.8 percent. Yield is estimated at 1.91 tons per hectare (MT/Ha), down from 2.07 MT/Ha from last year. Iran had poor winter precipitation in the important northeastern grains areas of (Golestan and Khorasan) that represents nearly 19 percent of the total production. Satellite vegetation index data indicates the crop in this region to be well below average. The key southern wheat regions of Khuzestan and Fars received good winter precipitation and are expected to be just above average production levels. (For more information, please contact Bill Baker at 202-690-8109202-690-8109.)

Australia Cotton: Low Reservoir Levels Likely To Reduce Irrigated Area

The 2014/15 Australia cotton crop is forecast at 3.1 million bales, down 1.0 million or 24 percent from last year. Harvested area is forecast at 0.320 million hectares, down 0.125 million or 28 percent from last year. Yield is forecast at 2,109 kilograms per hectare, 9.9 percent above the 5- year average. Lower planted area is anticipated as a result of reduced irrigation availability at sowing, which will commence in September. Irrigated cotton area accounts for about 90 percent of Australia’s total cotton output. Dryland cotton planting depends on the seasonal weather forecast, and conditions and prices at sowing. Irrigated cotton yields are substantially higher than dryland yields and the difference widens in low rainfall years. It is expected that reservoir levels will remain below 2013 levels, severely constraining the irrigated cotton area for the 2014 crop. Water levels in the cotton growing region are substantially down from last year. Current reservoir levels are 40 to 70 percent below last year’s levels. Assuming normal rainfall and recharge from now until sowing, the available irrigation supply would be lower than in 2013. (For more information, please contact James Crutchfield at 202-690-0135202-690-0135.)

China Cotton: Lower Estimated Area Due to Reduction in Price Incentives

China’s cotton production for 2014/15 is forecast at 29.5 million bales (6.42 million tons), down 2.5 million or 7.8 percent from last year. Harvested area is estimated at 4.35 million hectares, down 0.55 million or 11 percent from last year and the lowest area since 2000/01. This area reduction is partially offset by a higher forecast yield of 1,477 kilograms per hectare, up 3.9 percent from last year. China’s overall cotton yield is expected to increase as planted area declines in low-yielding regions in eastern China and becomes increasingly concentrated in northwest China, where cotton yields are generally higher.

A recent change in government policy is expected to reduce farmer payments and financial incentives for planting cotton in 2014. The new cotton production support policy for marketing year 2014/15 is applicable only to farmers in Xinjiang (in northwest China) and pays a direct subsidy based on a target price instead of price support purchases. The former policy had led to the accumulation of massive government-owned stocks and market-distorting domestic cotton prices. The program changes for 2014/15 are expected to cause a significant reduction in cotton area, particularly in the Yangtze and Yellow River regions, where the financial uncertainty of the new support program and higher profits for competing crops is expected to pull acreage from cotton. (For more information, please contact Paulette Sandene at 202-690-0133202-690-0133.)

Brazil Soybeans: Production Forecast at a Record 91 Million Tons

USDA forecasts Brazil’s 2014/15 soybean production at a record 91.0 million tons, an increase of 4 percent from 87.5 million tons in 2013/14. Harvested area is forecast at a record 30.5 million hectares, up 0.6 million hectares or 2 percent from last year. Yield is forecast at 2.98 tons per hectare, slightly better than the 5-year average.

Harvested area is expected to continue to increase for 2014/15, albeit at a more moderate pace. Area is expected to increase marginally in most well established soybean growing regions. The conversion of pasture land to soybean area continues, but higher purchase and rental prices for land combined with expected lower soybean prices, will limit expansion. In newer areas of Maranhão, Piaui, Tocantins, and northeastern Mato Grosso, conversion of pasture and native savannah (“cerrado”) continues to add soybean area. This frontier area will benefit the most from investment in transportation infrastructure connecting to the northern ports.

Another expansion area for Brazilian soybeans is north of the equator in Roraima and Amapá states, with Amapá having the distinct advantage of proximity to Atlantic ports. Soybeans in these areas are planted in May and harvested in September similar to other northern hemisphere soybeans.

Yields have traditionally been volatile in the southern states of Parana, Rio Grande do Sul, and Mato Grosso do Sul. In Mato Grosso, where more than 25 percent of Brazil’s soybeans are grown, yields are more stable. Mato Grosso soybean yields, however, have shown below-trend growth, probably due to the preference of short-cycle soybean varieties. The earlier-harvested soybeans are preferred so that a second crop of cotton or corn can be planted immediately following the soybean harvest.

Planting for the 2014/15 crop will begin in mid-September. Production costs have steadily increased with additional pest pressures such as Asiatic rust and Helicoverpa corn earworm. Current soybean prices are high, but not as high as recent years. Prices in the months leading up to planting will be critical to expansion plans. (For more information, please contact Bob Tetrault at 202-720-1071202-720-1071.)

 Ukraine Corn: Estimated Area Unchanged from Last Year

USDA forecasts Ukraine corn production for 2014/15 at 26.0 million tons, down 4.9 million or 16 percent from last year’s record output. Harvested area is estimated at a near-record 4.8 million hectares, essentially unchanged from last year. Yield is forecast at 5.42 tons per hectare, down 15 percent from last year’s near-record level but matching the 5-year average. Data from the Ministry of Agricultural Policy of Food indicate that planting is proceeding at a pace similar to the previous two years. As of May 5, sown area was reported at nearly 3.5 million hectares, about two-thirds of the official forecast. Prices for mineral fertilizer and imported agricultural chemicals (including herbicides, insecticides, and pesticides) have increased due to a significant drop in the value of the hyrvna (UAH), and local commodity analysts anticipate a reduction in the application rates of these products. Grain and oilseed producers will likely compensate in part for the higher prices with a variety of cost-cutting measures, including using cheaper but lower-quality chemicals and consolidating field operations in order to reduce fuel consumption. (For more information, please contact Mark Lindeman at 202-690-0143202-690-0143.)

Indonesia Palm Oil: Record Production Trend to Continue

Indonesia’s 2014/15 palm oil production is forecast at a record 33.5 million tons, up 2.5 million or 8.1 percent from last year. Mature oil palm area is also forecast at a record 8.54 million hectares, up 0.425 million or 5.2 percent from last year. Palm oil yields have been steadily rising for 13 consecutive years, and this trend is forecast to continue. Yield is forecast at a record 3.92 tons per hectare, up 2.6 percent from last year. USDA estimates that current immature oil palm area is approximately 2.2 million hectares, which should provide near-normal annual growth for at least the next four years. The rate of new plantings, however, has reportedly begun to decline during the past two years, as growers face new regulatory oversight and legal hurdles in opening new lands. Should this short-term trend continue, it will begin to reduce the historical expansion rate of 0.4 to 0.5 million hectares per year beginning in 2018. (For more information, please contact Michael Shean at 202-720-7366202-720-7366.)


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