Russia's Grain Production Forecast Down16 April 2012
RUSSIA - Assuming average weather during the growing season, FAS/Moscow forecasts Russia’s 2012 grain production at 88 million metric tons (six per cent) below last year, but close to the 5 year average.
By crop, 2012 forecasts are the following:
- Wheat – 54 MMT, 2 MMT below the 2011 crop
- Barley – 16 MMT, 1 MMT lower than 2011
- Corn – 6 MMT, 0.7 MMT lower than 2011.
In addition, production of rye, oats, millet are also forecasted to decrease from last year by one MMT total, and production of other grain crops and legumes are forecast to also fall by one MMT, while rice production is expected to remain at the same level as in 2011. The following factors are responsible for the overall lower production forecast for 2012:
- Winter kill in the Southern and North Caucasian federal districts (which are the the major producing regions of winter wheat) is estimated higher than last year and this could lead to reduced production of winter grains.
- Soil moisture in the Urals and Siberia is below last year’s level and below average, which may affect spring grain production.
- Shifts in sown area are expected to continue to non-grain fodder crops and oilseeds, such as sunflowerseeds and soybeans.
- While crop producers’ financial situation has improved in the 2011/12 marketing year, outstanding debts remain high, and it is unlikely that farmers will significantly increase investments for the improvement of yields in 2012/13. In addition, the Russian Government’s initiatives on increasing investments in land improvements (including irrigation) and in crop insurance will not yet influence crop production in 2012. It is also expected that Government funding will remain focused on supporting the poultry and livestock sectors rather than crop production.
Grain exports for the 2012/13 marketing year are forecast at 19 MMT, down from last year’s record of
26 MMT but still large. FAS/Moscow forecasts wheat exports at 16 MMT of wheat (from 21 MMT in
2011/12), two MMT of barley (2.9 MMT), 0.5 MMT of corn (1.2MMT) and 0.5 MMT of other grains and
legumes (down from 0.7 MMT in 2011/12).
Domestic food and industrial consumption is expected to remain at 34 MMT, as a small decrease in flour and cereals consumption in line with a shrinking population is offset by rising industrial consumption because of increased processing of grain into starches and syrups. Feed (including waste) consumption of grain is forecasted at 36 MMT, a one per cent increase from last year. Although livestock and poultry production is expanding, the efficiency of feed use of grain continues to improve and as a result feed growth rates are slower than that of animal and poultry numbers.
FAS/Moscow forecasts that carry-out grain stocks will remain steady at 13 MMT by the end of the 2012/13 marketing year.
Direct government support of the grain sector is unlikely to increase in 2012/13, especially farmers have enjoyed relatively good prices and production this past year, and government efforts are expected to continue to be targeted towards supporting the poultry and livestock industries. Announced government support for spring sowing in 2012 indicates that the government is using the same set of tools as were used in previous years, namely support of “voluntary” fuel and fertilizer price discounts for farmers, soft-term loans for purchasing equipment and for construction of storage facilities, and continued intervention purchases but at a low level.
The longer term mechanisms of grain production support such as restoration/improvement of irrigation, crop insurance, and clarity in agricultural land ownership, will not likely be implemented in 2012.
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