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USDA World Agricultural Production

13 May 2015

USDA World Agricultural Production - 13 May 2015USDA World Agricultural Production - 13 May 2015

USDA World Agricultural Production

Russia Wheat: 2015/16 Winter Wheat Improving, Spring Wheat Planting Underway

USDA forecasts Russia wheat production for 2015/16 at 53.5 million tons, down 5.6 million from last year. Harvested area is estimated at 25.0 million hectares against 23.6 million last year, and yield is forecast at 2.14 tons per hectare, down 14 percent from last year’s record but essentially matching the 5-year average.

The area sown to winter wheat last autumn was about 12 percent higher than the previous year, but due to remarkably dry weather during fall crop establishment, the surviving area is estimated to increase by only 4 to 5 percent. The poor establishment conditions were reflected in satellitederived vegetation indices (NDVI), which indicated that winter-crop vigor at the end of April was substantially worse than normal in nearly every major winter-wheat territory in European Russia, with the exception of Krasnodar and Stavropol in the south.


Winter crops benefited from generous April precipitation, however, and early May NDVI reflect substantial improvement in many territories in the Central District and Volga Valley. Potential yields will depend in large part on May and June weather. Winter wheat accounts for about two-thirds of Russia’s total wheat output. Spring-wheat planting was about 12 percent complete as of May 8 and is just underway in the Siberian and Ural Districts, which together account for about two-thirds of Russia’s spring wheat area. Soil-moisture conditions are favorable for planting in the main spring-wheat zone. Sown area is forecast to match last year’s level but harvested area is likely to increase from last year, when early snow in the Siberian and Ural Districts curtailed harvest. Sharp increases in the prices of fertilizer and imported agrichemicals will induce some farmers to reduce fertilizer application rates and switch to cheaper but less effective domestic chemicals. Many enterprises, however, enjoyed high profits from last year’s bumper harvest, which enabled them to purchase inputs last fall. Most independent commodity analysts do not envision a large year-to-year drop in the use of these materials. (For more information, please contact [email protected])

India Wheat: Declining Prospects for 2015/16 Production

The harvest of India’s 2015/16 wheat crop is in progress and will continue through May. USDA estimates production at 90.0 million tons, down 5.85 million tons or 6.1 percent from last year’s record. Output is projected to be the lowest in the past 3 years. Area is forecast at 30.6 million hectares, down 3.0 percent from last year. Yield is forecast at 2.94 tons per hectare, down 3.3 percent from last year. The month-to-month reduction is based on reports of excessively wet conditions and hailstorms that resulted in delayed harvest and poor harvesting conditions (including lodging). The major wheat areas in Punjab, Haryana, and Uttar Pradesh experienced favorable weather during most of the growing season. Planting was completed earlier than usual and conditions remained favorable for the major part of the growing period. Satellite-derived vegetation indices indicated higher-than-previously expected yields in Uttar Pradesh, Punjab, Haryana and northern parts of Madhya Pradesh. Excessive rainfall in February and March, however, resulted in excessively wet field conditions during the grain-fill stage and harvest. April harvest reports indicated a significant reduction in potential yield in north-west Uttar Pradesh and south-east Haryana. (For more information, please contact [email protected])

Thailand Rice: 2015/16 Production Forecast to Rebound to Near-Normal Levels

USDA forecasts 2015/16 milled rice production in Thailand at 19.8 million tons, up 1.05 million tons or 5.6 percent from last year. Harvested area is forecast at 10.7 million hectares, up 4.0 percent from last year. Yield is estimated at a near-average 2.81 tons per hectare, up 1.5 percent from last year. Assuming normal rainfall during the upcoming wet-season growing period, major reservoirs should experience healthy recharge rates in 2015, allowing farmers to increase irrigated dry-season area next year. Normal rainfall would also support normal crop yields in the main wet-season crop, which will be sown from May-July 2015.

The wet season rice crop typically accounts for approximately 70 percent of total production. Government restrictions on irrigation water distribution and falling domestic rice prices caused farmers to significantly reduce dry season rice acreage in 2014/15. Less restrictive policies may be possible in 2015/16 owing to the anticipated increase in reservoir levels. Given the forecast of a normal rainfall pattern, 2015/16 rice production is expected to increase in both wet and dry seasons, but the most significant growth is forecast for the 2015/16 dry season crop owing to an increase in irrigation supplies that will support both higher sown area and higher yields. (For more information, please contact [email protected])

Brazil Corn: Estimated 2014/15 Production Increased Due to Record Second Crop

USDA forecasts Brazil corn production for 2014/15 at 78.0 million tons, up 3.0 million tons or 4.0 percent from last month, but down 2.0 million tons or 2.5 percent from last year. Estimated area is unchanged at 15.0 million hectares, down 0.8 million hectares or 5.1 percent from last year. Yield is forecast at a record 5.20 tons per hectare due to the increase in second-season corn yields. Brazil has two seasons for corn production. First-season corn is planted in September and harvested in March. A larger second-season, or safrinha crop, is expected to be over 60 percent of national production. The safrinha crop is planted after the early season soybean harvest, typically in January and February. The safrinha crop is harvested from June through August and is mostly exported. Brazil’s second-season corn yield is forecast at a record 5.44 tons per hectare.

Precipitation has been above average in the main producing states of Mato Grosso, Goias, Mato Grosso do Sul and Parana. The precipitation and cool night-time temperatures benefitted corn as it advanced through flowering and early grain-fill stages. Vegetation health, as measured by satellite-derived indices, indicate biomass above average, and in some places above last year’s impressive corn yields. Brazil’s safrinha corn yields are determined chiefly by rainfall in April and May. For the past three years, second-crop corn yields have been high (5.13, 5.19 and 5.25 tons per hectare) because the rainy season extended into late May and June. Farmers plant as early as possible after the soybean harvest to mitigate risks of an early ending of the rainy season. Corn conditions in Mato Grosso are better than last year and much improved in Goias despite being delayed. (For more information, please contact [email protected])


Brazil Soybeans: 2015/16 Production at a Record 97 Million Tons

USDA forecasts Brazil’s 2015/16 soybean production at a record 97.0 million tons, up 2.5 million tons or 2.6 percent from last year. Harvested area is expected to increase 3.2 percent to a record 32.5 million hectares, up 1.0 million hectares from last year. Area has increased for nine consecutive years, but this year’s increase is the smallest since 2012/13. Although soybean prices are lower than last year, profitability remains high due to the devaluation of Brazil’s currency.

Soybean area is increasing across Brazil but each region has specific drivers. Traditional areas (the southern states) are expected to increase soybean area because the relative profitability of soybeans are high compared to first-season corn and first-season cotton. Center-West states are forecast to continue expansion due to conversion of pasture. The Maranhao-Piaui-Tocantins (MaPiTo) region is expected to increase soybean area because land is less expensive. Brazil’s soybean yield is forecast at 2.98 tons per hectare, slightly lower than last year but above the 5-year average. Yields at the national level are relatively stable. Regionally, traditional soybean growing areas (the southern states, which account for 47 percent of national output) have volatile yields due to the influence of droughts, as does the MaPiTo region (6 percent). Center-West areas (47 percent) have a more stable climate and relatively stable yields. Planting of Brazil’s 2015/16 soybean crop begins in September 2015 and the main harvest months are February and March 2016. (For more information, please contact [email protected])

European Union Rapeseed: 2015/16 Crop Down from Last Year’s Record

European Union (EU) 2015/16 rapeseed production is estimated at 21.6 million tons, down 2.7 million tons or 11 percent from last year’s record crop. Yield is estimated at 3.3 tons per hectare (MT/Ha), down 8.1 percent from last year’s record of 3.59 MT/Ha, but 5.4 percent above the 5- year average of 3.13 MT/Ha. Area is estimated at 6.55 million hectares, 0.2 million hectares below last year.

EU rapeseed area for 2015/16 is estimated to slip to its lowest level since 2012/13. A combination of factors prevented 2015/16 area from reaching the level it attained last season. Changes in the EU biofuels policy were perceived to weaken demand for rapeseed oil and therefore lower prices. The latest EU Common Agriculture Policy (CAP) revisions encourage crop diversification. A new regulation imposed a neonicotinoid ban seen by producers as increasing the pest risk to rapeseed. Wheat, the primary competing crop to rapeseed, appears to be a more profitable choice, with farmers electing to switch from rapeseed to wheat. In addition, planting in many areas of the Balkans was difficult due to intervals of both excessive rainfall and dryness, resulting in poor emergence.

Rapeseed has had little if any winterkill damage due to the very mild winter throughout Europe. Rainfall has also increased during recent weeks, after a period of dryness in March through midApril. Rapeseed typically flowers throughout Europe in May, so this month will prove critical for its yield, and the recent rainfall has certainly been beneficial. MODIS NDVI satellite imagery analysis indicates vegetative crop conditions across Europe to be higher than average, but lower than last year. (For more information, please contact [email protected])

Canada Rapeseed: 2015/16 Area Harvested Expected to Decline

USDA estimates Canada’s 2015/16 rapeseed harvested area at 7.7 million hectares, down 4.6 percent from last year. The year-to-year decrease is attributed to crop rotation constraints, rising input costs, and uncertainty in the market. Production is forecast at 14.8 million metric tons, down 5.0 percent from 2014/15. Yield is forecast to match the 5-year average at 1.92 tons per hectare. Statistics Canada’s 2015 March Principal Field Crops reports that farmers plan to seed 7.857 million hectares, down 4.5 percent from 2014. Saskatchewan and Alberta, which account for 84 percent of total acreage, reported decreases of 4.2 percent and 7.7 percent, respectively. Manitoba area is up nearly 2 percent from last year. Planting is proceeding at a rapid pace due to dryer-than-normal conditions. (For more information, please contact [email protected])

China Cotton: 2015/16 Crop Production at 12-Year Low

China’s 2015/16 cotton production is estimated at 27.0 million bales, down 3.0 million bales or 10 percent from last year and the smallest crop since 2003/04. The estimated area of 3.70 million hectares is down 16 percent from last year and is the lowest area since 1949. Yield is forecast at a record 1,589 kilograms per hectare, up 7.1 percent from last year.

The reduction in area is related to changes in China’s cotton policy that were introduced in 2014 and expanded in 2015. The previous guaranteed-purchase policy, which resulted in huge government-owned stocks and domestic cotton prices that were much higher than the world price, was replaced with a target price-based support policy. The new policy has resulted in lower profits for cotton farmers, who have responded by shifting from cotton to other crops (such as rice and corn) that offer higher returns or receive greater government support.

In April, the National Bureau of Statistics forecast an 11-percent reduction in national cotton area for 2015/16, while several industry analysts have forecast an area reduction of more than 20 percent. The largest area reduction is expected to occur in the Yellow and Yangtze River basins, where high labor costs, declining cotton prices, and uncertain government support have discouraged cotton farmers. Planted area is expected to remain close to last year in Xinjiang, where cotton enjoys a strong comparative advantage and yields are the highest in the country.

Cotton planting began in early April and will conclude in May. Unusually cool and wet weather in March and early April caused minor planting delays in northern Xinjiang and the Yangtze River basin, while dryness and spring sandstorms hindered planting in parts of southern Xinjiang and the North China Plain. However, the weather has been generally favorable for cotton seedling development in recent weeks as indicated by satellite imagery. (For more information, please contact [email protected])

India Cotton: Lower Area Forecast for 2015/16

USDA forecasts 2015/16 India cotton production at 29.5 million bales (480-pound bales), down 0.5 million from last year. Area is forecast at 12.0 million hectares, down 5.5 percent from last year. Yield is forecast at 535 kilograms per hectare, up 4.1 percent from last year. In the past 5 years India’s cotton area and yield have averaged approximately 11.95 million hectares and 533 kilograms per hectare, respectively. The year-to-year decrease in estimated area is based on unfavorable prices for the 2014/15 crop, which fell below government established minimum support prices.

The major cotton growing states are Gujarat, Maharashtra, Andhra Pradesh, and Madhya Pradesh. Cotton is grown during the kharif (monsoon) season, from June through September. In some northern regions (including Punjab and Haryana), the planting of irrigated cotton begins in April or May. The current outlook is based on the assumption of normal weather during the upcoming growing season. (For more information, please contact [email protected])

Malaysia Palm Oil: 2015/16 Record Production Forecast

Malaysia’s 2015/16 palm oil production is forecast at a record 21.0 million tons, up 1.2 million tons or 6 percent from last year. Mature oil palm area is forecast at a record 4.8 million hectares, up 111,000 hectares or 2 percent from last year. Palm oil yields are forecast to rebound by nearly 4 percent from last year, when adverse weather – including both drought and floods – caused unusually high crop losses in both western and eastern producing areas. Yield for 2015/16 is forecast near the 5-year average of 4.38 tons per hectare. USDA estimates that current immature oil palm area is approximately 0.7 million hectares, which should provide near-normal annual growth for at least four years. However, the rate of re-planting (i.e., the replacement of older trees) has also reportedly increased during the past two years, as both commercial-scale growers and smallholders deal with the glut of very old trees, which are suppressing national yield improvement. Peak yield is between the ages of 10 to 20 years. Between years 20 to 40, yield declines by 20 to 50 percent. According to the Malaysian Palm Oil Board in 2008, it estimated that 22 percent of the total oil palm acreage was over 20 years old. (For more information, please contact [email protected])

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