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Commodity Intelligence Report
May 15, 2006

Ukraine:  Wheat Yield Forecast to Drop Due to Severe Fall Drought

Analysts from the USDA Foreign Agricultural Service (FAS) traveled through central, southern, and eastern Ukraine in April to examine winter crop conditions and spring planting progress.  The team met with agricultural officials and independent commodity analysts in Kiev and conducted farm visits throughout the major production regions for winter wheat, winter barley, spring barley, corn, and sunflower seed.  Winter wheat and winter barley were observed to be in generally poor condition due chiefly to severe fall drought, and spring barley planting was significantly delayed due to cool, wet weather.  The USDA estimates total 2006/07 grain production for Ukraine at 29.6 million tons (against 37.9 million in 2005/06), including 10.0 (18.7) million wheat, 9.3 (9.0) million barley, and 7.5 (7.2) million corn.  Initial estimates for 2006/07 sunflowerseed and other oilseeds will be released on June 9, 2006.

Ukraine wheat area is marked by occasionally sharp year-to-year fluctuation but no consistent upward or downward trend. Wheat Area
Wheat area for 2006/07 is estimated at 5.2 million hectares.  The planted area of  winter wheat dropped from 6.3 million hectares last year to 5.1 million due to a combination of fall dryness and low prices.  According to commodity analysts in Kiev, lower-than-expected government procurements of 2005/06 wheat resulted in high stocks and low prices in the fall of 2005, when farmers – especially those on smaller farms with little or no cash reserves – desperately needed cash for winter-grain planting.  An estimated 10 to 11 percent of the planted winter wheat area will not be harvested due to the fall drought or winter damage.  Sowing reports indicate that farmers planted 0.5 million hectares of spring wheat, slightly lower than the official forecast of 0.6 million.

Fall Drought
Persistent fall dryness persuaded some farmers to reduce the area sown to winter wheat, but the major effect of the dryness will be a reduction in potential yield.  The drought began in late August and continued well into October – or, in some regions, until November – and delayed the planting and establishment of winter crops.  Although mild late-autumn weather compensated in part for the late planting, and only about 1 percent of the planted area failed to emerge prior to the arrival of winter, crops were in unusually poor condition as they entered dormancy.  The Hydromet Center of Ukraine estimated in December that 26 percent of the country’s winter wheat was in unsatisfactory condition compared to roughly 9 percent last year.

January Frost
In mid-January, bitterly cold weather threatened winter crops in areas where snow cover was shallow or patchy.  Analysts’ early forecasts of total winter crop losses varied widely, from roughly 10 to 30 percent.  The team observed, however, that frost damage to winter wheat was lower than expected, even in eastern Ukraine where January temperatures were lowest.  These observations were consistent with a March Hydromet Center report estimating that 27 percent of the country’s winter wheat was in unsatisfactory condition – virtually unchanged from the December estimate and indicating that little additional damage resulted from the January frost.  Hydromet Center analysts emphasized, however, that this estimate should not be regarded as an estimate of winterkill, but rather an indicator of the extremely weak crop conditions. 

Barley and rape, which are less resistant to cold weather, suffered greater damage from the low January temperatures.  ProAgro, an independent commodity analysis group, estimated in mid-March that 28 percent of Ukraine’s winter rape area was destroyed due to the combination of fall drought and January frost compared to only 7 percent of the winter wheat area.  Farmers in south-central Ukraine reported 100-percent losses on some winter barley fields, but losses tended to be highly localized.  For example, damage was more severe on northern-facing fields and on fields that lost their protective snow cover due to drifting.

Winter Grains in Poor Condition
The FAS analysts observed winter crops to be in generally poor condition throughout central, southern, and eastern Ukraine, with fields marked by patchy emergence, poor stands, and late development.  Crop FAS analysts observed in early April that root systems in most winter grain fields were poorly developed compared to a typical year.  Farmers attributed the poor root systems to the lack of fall precipitation which hampered crop establishment.conditions were best – but not particularly good – in central Ukraine, and worst in southern and eastern Ukraine.  Wheat plants in many fields throughout the main winter wheat region were just beginning to develop secondary roots in early April; plants typically develop secondary roots in the fall prior to entering dormancy.  Farmers reported delays in winter wheat development from one to four weeks due to the combination of delayed fall establishment and cool spring weather.  Although most of Ukraine’s winter wheat survived the January frosts, the bitterly cold weather further weakened plants that were already in poor condition because of the fall drought.  Wheat yield for 2006/07 is estimated at 1.92 tons per hectare, in sharp contrast to the high yields achieved in four of the past five years, but higher than the disastrous 2003/04 crop which was marked by huge winter losses and severe summer drought.

Southern Ukraine is a region prone to frequent drought, and farmers have adopted crop-production practices that tend to preserve scarce moisture reserves.  Many farmers include a year of “clean fallow” in the crop rotation once every five to seven years.  The chief  reasons for the use of fallow are moisture conservation and, to a lesser extent, weed control.  The absence of a planted crop enables soil-moisture reserves to rebuild, and the benefits of fallow were clearly demonstrated in southern Ukraine this year.  Post-fallow winter wheat fields typically were in better condition than “wheat-after-wheat” fields due to greater moisture available during fall establishment.  

 Wheat fields sown after fallow typically were in better condition than wheat-after-wheat fields due to greater moisture available during fall establishment.

Some farmers have adopted no-tillage or reduced-tillage practices in order to conserve moisture and reduce fuel costs, but these techniques require a substantial investment in specialized minimum-tillage grain drills and tractors powerful enough to pull them, and most farmers lack the necessary cash for these investments.  The manager of a large agricultural enterprise in Kherson oblast estimates that approximately 30 percent of farms in the region effectively use some form of reduced tillage. 

Kherson oblast, in south-central Ukraine, has more irrigated area than other territories in Ukraine, but the irrigation system has fallen into disrepair and the area under irrigation has dropped from 425,000 hectares in the early 1990’s to about 250,000 hectares at the present time.  Kherson officials estimate that about 100,000 hectares of winter wheat, or roughly 25 percent of total wheat area, is irrigated.  (About half of the irrigated area is devoted to forage crops.)

Yield Prospects for Barley
Barley production for 2006/07 is estimated at 9.3 million tons (against 9.0 million last year) from 4.7 (4.4) million hectares.  Cool March weather and wet soil conditions caused sowing delays of two to three weeks for early spring grains, chiefly barley.  With favorable planting weather, spring sowing typically is fully underway by mid-March and is roughly half complete by the first week of April.  This year, only about 250,000 hectares of spring grains were planted by the beginning of April compared to over 3 million hectares by the same date in 2004 (a year of rapid spring planting).  Even a considerable delay in the launch of the spring sowing campaign, however, does not translate to a reduction in final sown area of spring barley; note that reported spring barley area for 2006/07 is the third-highest in the past twenty years.  Data on area, yield, and planting progress over the past ten years indicate that the planted area for barley does not fluctuate significantly from year to year regardless of the pace of planting. 

right The data do suggest, however, that late planting has a negative effect on yield.  Over the past ten years, every year with significant planting delays (including last year) was also marked by below-average yield.  Although this year's planting pace accelerated during April and the sowing of early spring grains was 90 percent complete by April 26, a considerable portion of the spring barley was planted beyond the optimum planting date.  According to farmers, late planting tends to reduce barley yield for two reasons: 

  • the root systems of late-planted barley typically fail to fully develop and potential yield is reduced regardless of subsequent weather;
  • because of delayed development, the crop is more likely to encounter heat and moisture stress during critical growing stages. 

Prospects for winter barley, which typically accounts for about 10 percent of Ukraine’s barley production, are poor.  Harvested area is forecast to drop from last year – despite an increase in planted area – due to above-average winterkill, and yield is unlikely to reach last year’s level. 

Corn production for 2006/07 is estimated at 7.5 million tons (against 7.2 million last year) from 2.0 (1.7) million hectares.  As of May 11, with planting roughly two-thirds complete, corn had been planted on 1.43 million hectares.  Although the increasing use of high-quality corn hybrids (especially root-worm resistant hybrids) has contributed to higher Ukrainian corn yields in recent years, the area planted with hybrids remains relatively small due chiefly to the high cost of the seed.  Generally speaking, only large agricultural enterprises can afford hybrid seed, and a large share of Ukraine’s corn is grown on private farms or small household plots for domestic feed consumption.  Corn in Ukraine is still grown and sold chiefly for feed, and Ukrainian commodity analysts suggest that the growing global interest in ethanol is unlikely to have any immediate effect on Ukrainian corn production. 

Current USDA area and production estimates for grains and other agricultural commodities are available on PECAD’s Agricultural Production page, or at PSD Online.

For more information contact Mark Lindeman | | (202) 690-0143

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