World Agricultural Production - July 2008

This report prepared by the USDA FAS International Production Assessment Branch reflects official USDA estimates released in the World Agricultural Supply and Demand Estimates (WASDE-460) July 11, 2008.
calendar icon 16 July 2008
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Iran Wheat: Drought Reduces Crop

Total wheat production in Iran in 2008/09 is estimated at 10.0 million tons, down 2.0 million or 17 percent from last month and down 33 percent from last year. Harvested area is estimated at 5.9 million hectares, down 15 percent from last year, while yield is expected to decline by 21 percent to 1.71 tons per hectare. Wheat yields were affected by a serious drought and high temperatures during the 2008/09 growing season. Winter grain growing conditions over much of Iran were significantly worse than last year owing to prolonged late season drought. Most of Iran’s wheat growing regions had inadequate planting rains, with rainfall averaging 50 percent of normal during the important September through November period. Late rainfall did arrive in mid-November to help farmers get grain crops sown in the last few weeks of the planting window; however, it is unknown whether total wheat area declined as a result, as happened in both Iraq and Syria this year. As grain crops emerged from winter dormancy in March, severe drought conditions developed. Soil moisture models indicate that well above normal temperatures combined with limited rainfall caused a sharp decline in plant-available-moisture beginning in late February, and continued through crop maturity. These adverse growing conditions were prevalent in most major producing areas of Iran, and likely impacted both rainfed and irrigated crop yields. Based on estimates from Iran’s Ministry of Agriculture, 61 percent of the country’s wheat area is rainfed and 39 percent is irrigated. Satellite vegetation index (NDVI) imagery in April 2008 indicated substantial problems in key wheat growing regions in Iran. As drought conditions deepened, the NDVI images provided clear evidence that crop conditions were much worse than last year in most areas of the country. The most severe declines in crop yield potential were focused in northwest, northeast, and south central Iran – encompassing all the major producing provinces. Iran’s Commerce Minister reported on June 11th that harsh winter temperatures and widespread drought had significantly reduced wheat production, and that Iran needed to import a total of 5.0 million tons to meet its normal annual consumption requirement.
(For more information, contact Michael Shean at 202-720-7336.)

IRAN: Vegetative Index Difference from Last Year

Australia Wheat Production Rebounds

Wheat production for 2008/09 is forecast at 25.0 million tons, up 1.0 million or 4 percent from last month, and up 12.0 million or 91 percent from last year. The large year-to-year rise in production is the result of forecast increases in both area and yield. Area is forecast at a record 14.0 million hectares, up 0.5 million or 4 percent from last month, and 1.66 million or 14 percent above last year. Yield is forecast at 1.79 tons per hectare, 67 percent above last year and well above the five-year average yield of 1.53 tons per hectare. This season’s area increase is a culmination of three factors: improved rainfall, strong economic incentive for growers to recoup losses incurred during the 2006 and 2007 droughts, and the conversion of last season’s pasture into field crops. Rainfall was sufficient for timely planting of this season’s record area which occurred from April through July. The 2007 winter and summer drought severely impacted pasture growth which, combined with high feed grain prices throughout the country, led farmers to sell off large numbers of cattle and sheep. According to the Australia Bureau of Statistics, sheep numbers are the lowest since 1925. Some of this unused pasture land will be converted to wheat area.
(For more information, contact Jim Crutchfield at 202-690-0135.)

EU-27: Estimated Wheat Production Up Nearly 20 Percent from Last Year

The USDA estimates the 2008/09 European Union (EU-27) wheat crop at 141.7 million tons, 1.7 million or 1 percent above last month and 22.2 million or 19 percent above last year. Harvested area is estimated at 26.6 million hectares, unchanged from last month and 1.9 million or 8 percent above last year. Yield is estimated at 5.33 tons/ha, second only to the 2004/05 crop. A combination of factors has boosted potential wheat output this season. Prices were at record highs at planting time. Following two consecutive disappointing harvests, the EU’s Common Agricultural Policy (CAP) was modified to eliminate its mandatory 10-percent set-aside requirement for area in 2008/09. Finally, weather in Europe has been generally favorable in most growing regions since autumn planting, with the exception of persistent late-spring dryness in eastern Germany and western Poland. Despite the dryness, however, local officials suggest that winter precipitation was adequate for winter-crop development, and timely July rainfall benefited wheat in the grain-fill stage. The more pressing concern in this region, according to officials, is potential damage to spring-planted crops.
(For additional information, contact Bryan Purcell at 202-690-0138.)

India Corn: Production Forecast at Near Record Level

The USDA forecasts 2008/09 India corn production at 18.5 million tons, up 1.0 million or 6 percent from last month, but virtually unchanged from last season’s record production of 18.54 million tons. Area is forecast at a record 8.4 million hectares, unchanged from last month and up 1 percent from last year. The higher estimated production is attributed to a forecast record area and an above average yield following favorable sowing conditions in major growing states of Uttar Pradesh, Bihar, Madhya Pradesh and Gujarat. In addition, the increasing use of hybrid seeds is expected to result in above average yields. According to the government of India, sowing progress is outpacing last season. As of July 4, sown area was 26 percent greater than at the same time last year, and planting was estimated to be 32 percent complete.
(For more information, contact Jim Crutchfield at 202-690-0135.)

Russia: Estimated Corn Production Reduced by 1.0 Million Tons

The USDA estimates Russia corn production for 2008/09 at 5.8 million tons, down 1.0 million or 15 percent from last month but up 1.9 million or 47 percent from last year. Harvested area is estimated at 1.6 million hectares, down 0.2 million from last month but up 0.3 million from last year. The area revision is based on planting-progress data released by the Ministry of Agriculture. The forecast yield of 3.63 tons per hectare is down by 4 percent from last month due to localized dryness in parts of the southern Central and central Southern Districts. Although timely rainfall during the first week of July partially alleviated the dryness and weather data indicate that corn has suffered only minor damage, the crop would benefit from additional rainfall as it advances toward the heat- and moisture-sensitive reproductive stage.

According to information from the U.S. agricultural attaché in Moscow, two additional factors could hamper corn output this year. Following a steady increase in the use of hybrid planting seed in Russia in recent years, producers this season have reported shortages of high-quality planting seed. While difficult to quantify, a reduction in the use of hybrid seed would almost certainly have a negative effect on yield. Furthermore, local reports indicate that some farmers in the Central District and Siberia who have started new dairy projects will likely consider harvesting corn at the milking or soft-grain stage for high quality forage, rather than harvesting the crop for grain.
(For more information, contact Mark Lindeman at 202-690-0143.)

India Soybean: Second Largest Crop Forecast

India's 2008/09 soybean production is forecast at 8.7 million tons, unchanged from last month, but down 0.6 million or 6 percent from last year. The area is forecast at a record 9.1 million hectares, unchanged from last month, but up 0.3 million or 3 percent from last year. Higher government support prices for soybeans and increasing government capacity in oilseed procurement will fuel increased plantings. Better soybean returns received by farmers last season as compared with competing crops are also expected to result in a record area this season.

The major growing areas of central and eastern Madhya Pradesh received excellent rainfall for sowing, in contrast to parts of western Madhya Pradesh and Maharashtra where there has been below normal rainfall as of July 5. Currently the 2008/09 forecast production will be second only to last season’s record production. Yield for 2008/09 is forecast above average but below the record set partly because of last season’s abundant July rainfall. Soybeans are grown exclusively in the kharif season under mostly rainfed conditions. The ideal sowing window is early to mid-June and typically commences with the arrival of the monsoon. Some farmers are able to provide supplemental irrigation, though this practice is limited by water reserves and equipment. The main producing states are Madhya Pradesh (53%), Maharashtra (34%), and Rajasthan (8%).
(For more information, contact Jim Crutchfield at 202-690-0135.)

India Cotton: Record Crop Remains Forecast for 2008/09

India's 2008/09 cotton production is forecast at a record 25.5 million bales, down 1.0 million from last month, but up 0.2 million from last year. The area is forecast at 9.35 million hectares, down 0.3 million from last month, and down 0.18 million from last year. According to the FAS Office of Agricultural Affairs in New Delhi, cotton planting for the 2008/09 season is expected to decrease from last season as a result of a shift to oilseeds and coarse grains. The major portion of the area shift is expected in the state of Gujarat as farmers move back into the more profitable peanut. Sowing in the mainly irrigated Northern Zone has been completed for several weeks; however, rains in Andhra Pradesh have so far been insufficient to initiate widespread planting. Recent light rains in the western growing state of Gujarat followed by heavier rains have allowed the resumption of cotton sowing. It is widely accepted that the strong upward trend in India’s cotton yield in recent years is largely a result of the increasing adoption of Bt cotton. It is anticipated Bt cotton planting in 2008/09 will account for more than 70 percent of the expected cotton area. During the previous two years, the government of India approved 62 new insect resistant Bt varieties for commercial cultivation. In addition to the approved varieties, there are over 50 Bt cotton hybrids, illegally bred and marketed by farmers and seed companies, which are available at lower prices versus the officially approved varieties. Given the year-to-year increase of Bt area, a record yield of 594 kilograms per hectare is forecast for the season.
(For more information, contact Jim Crutchfield at 202-690-0135.)

Higher China Barley Yields Due to Favorable Weather

China’s 2008/09 barley production is estimated at 3.5 million tons, up 0.3 million from last month and last year. The winter barley crop, grown primarily in central China, was planted in Sep/Oct 2007 and harvested in May/June 2008. Abundant precipitation and seasonable temperatures in the spring created favorable growing conditions and raised yield prospects for the 2008/09 crop. The weather has also been mostly favorable in northern China for the spring barley crop, now in the heading to grain fill stage. However, a persistent drought in the northwest provinces of Xinjiang and Gansu could result in yield losses.
(For more information, contact Paulette Sandene at 202-690-0133).

Further Reading

- You can view the full report by clicking here.

July 2008

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