Late Summer Crop Travel to Central and Southeast
Europe Revealed Higher Yield Expectations

Objective and Background
Agricultural specialists from the USDA’s Foreign Agricultural Service (FAS) traveled through several central and southeastern European countries during late August and early September to assess 2009 crop conditions. The main crops in this region include wheat, barley, corn, rapeseed, and sunflowerseed. The trip included visits to the European Union countries of the Czech Republic, Slovakia, and Romania, as well as non-EU member Serbia.  During the tour the group met with various members of the agricultural community including farmers, local and state government officials, agricultural statisticians, traders, commodity associations, research institutions, grain experts, mill operators and processors.  The group also attended a trade show and visited numerous fields along the route, monitoring current conditions and collecting information on local and regional agricultural issues from multiple sources.

Economic Decisions

Many producers in the region reduced fertilizer and chemical applications, wages, and other variable costs in response to reduced demand, increased input costs, and lower grain prices, largely associated with the economic downturn.  Experts often mentioned that the producers who had invested heavily in inputs this season were not recovering their costs.  This was a result of high fertilizer and chemical prices while the price for grains dropped much below last season’s record highs. Farmers who used fewer inputs this season apparently had better net returns.  Another commonly expressed sentiment was that livestock numbers and feed consumption was down due to fewer meat purchases by consumers. Significantly lower milk prices have also driven down feed demand in the dairy sector.  While large corporative farms are typically better positioned to weather difficult economic times because of their deeper pockets and higher number of assets, many smaller farmers continue having financial problems.  Some of the more adaptable small farmers; however, have been moving into niche markets, such as selling directly off the farm to end consumers, switching to organic production, or growing energy crops.  Overall though the high percentage of small farms and their associated inefficiencies continues to be a drain on agriculture in central and eastern Europe. 

Czech Republic and Slovakia:

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Summary

Rapeseed is the dominant oilseed crop in both the Czech Republic and Slovakia with production at 1.1 million and 0.375 million tons, respectively in 2009/10.  It far outpaced the second most common oilseed crop, sunflowerseed with production at 0.06 million and 0.150 million tons, respectively in 2009/10.  Rapeseed is often planted on the less productive lands such as on slopes or hilly areas, leaving the more productive land for wheat, corn, and malting barley.  Planting autumn-sown rapeseed to these areas helps reduce soil erosion because its established root system and leaf coverage holds soil in place during winter storms. Rapeseed area in the Czech Republic and Slovakia is thought to have reached its upper limit due to land availability and crop rotation constraints. Rapeseed area in the Czech Republic has remained stable at roughly 0.355 million hectares for three years while Slovakia's area has remained steady at about 0.165 million hectares.  Rapeseed planting takes place in earnest during the second half of August – typically it is the first crop sown in the fall.  It is followed by winter barley in September and winter wheat in October. The 2009/10 wheat harvest was delayed by a couple weeks because persistent rain at the end of June and the beginning of July prevented field activities. By mid-August however, a break in the rain allowed the completion of wheat harvesting. The 2009 harvest results for autumn-sown crops (including wheat, rapeseed, and winter barley), revealed another bumper crop in the Czech Republic and Slovakia.  Malting barley is one of the region's most profitable crops.  Central Europe's famous brewing industry demands a large quantity of locally grown spring barley for malting. 

Romania

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Weather and Crop Conditions
Corn appeared to be in very good condition at the end of August, far better than expected.  Over the summer, worries had developed about the country’s summer crop prospects because of a severe drought during the spring.  Little rain fell in Romania during April and May; however according to farmers, this was not as dire a situation because soil moisture had remained adequate due to high winter precipitation.  In addition, the end of June and the beginning of July brought widespread rainfall to the ripening crops at just the right time. This rainfall coincided with the grain-fill stage of much of the corn and sunflower crops. In the words of several farmers, this rainy period “saved the crop.” It also greatly boosted yields. After experiencing extended warmth and dryness, the crops were further along than normal. During late August corn was drying down in the field while sunflowerseed (typically harvested in September) was already being harvested.

Climatically, precipitation is more plentiful along the western plain of Romania, the area bordering Hungary than in the larger agricultural areas of south and southeastern Romania.  Precipitation in many of the cropping regions is limited by the effects of the moisture blocking Carpathian Mountains in the center of the country. The topography typically leads to better yields in the Banat region of the west around Timisoara.  The small area of Satu Mare in northwestern Romania was cited as being the very best corn producing-region in Romania. Overall, the Romanian corn crop was estimated to be about two to three weeks early while the sunflower crop was about a week earlier than normal with harvest having begun in late August. Sunflowers are planted before corn in the spring because they need the cool temperatures during emergence. Corn typically reaches silking and tasselling by mid-June.  During the short pollination period in July, temperatures must remain below 30° C because temperatures in the corn rows can be 15° C higher than the ambient temperature.  At this point, pollen can be damaged in the air before it reaches the silk.  The month of July is when grain fill occurs for both corn and sunflower. Rainfall during grain fill is very beneficial for kernel development.  This was the scenario that occurred this season when June and July rainfall led to upward revisions in yield estimates. The same period coincides with the rapeseed harvest;  and rapeseed is highly sensitive to rainfall at harvest. Wind and rain can shatter or break off the pods, causing seed loss. Contrary to the benefits for summer crops, this year’s late June and early July rain arrived at an inopportune time for rapeseed, lowering yields.

Romania’s rapeseed production has seen exponential growth during the last five years. According to experts, this trend is likely to continue until it reaches about 0.55 million hectares. If the present trend continues, this estimate will quickly be reached.   The 2009/10 rapeseed crop is estimated to be 0.44 million hectares and 0.6 million tons.  As a new member of the European Union (EU), Romania has focused on increasing production of energy crops to meet the EU mandate.  Romania's corn crop is dominated by non-hybrid varieties.  The higher-yielding hybrids comprise only about 30 percent of the total crop.  This compares to 95 and nearly 100 percent hybrid-varieties in Bulgaria and Serbia. Romania's economic situation, its small farm size, and its large number of small farms play a big role in its low rate of hybrid adoption.

Irrigation and Technology

Crop irrigation is largely limited to the lowlands and high water table areas along the Danube River. In other locations, pivot and other mechanical irrigation systems are mostly restricted to the more profitable horticulture crops and the production of seeds.  According to experts, total area available for irrigation is down from a high of 3.0 million hectare in 1990 to about 550 thousand hectares available today.  In addition, of the 550 thousand hectares, less than half is actually irrigated because of the cost to the producer.  Deterioration and a lack of investment in the infrastructure systems occurred after the regime change of the early nineties. Corn and soybeans tend to be the favored crops on the irrigated and high water table areas along the Danube River. When they are grown in this scheme they are frequently double-cropped.  Barley can follow corn or corn after wheat. Soybeans are a minor crop in Romania (estimated at just 50 thousand hectares and 80 thousand tons), but can be particularly profitable on irrigated land.  Production of soybeans has dropped dramatically since the country joined the EU and banned cultivation of GM soybeans. Prior to Romania's entry into the EU,  Romania planted BT and conventional soybeans on almost 200,000 hectares, with over half being GM varieties.

Agriculture Practice
While Romanian agriculture has benefitted from being part of the EU system, there were several complaints made by producers about late-arriving subsidy payments. One other thing that was apparent during the tour was the large amount of uncultivated land – not land just lying fallow or waiting for next season’s crop but vacant land.  Much of the country's agricultural land is divided into small parcels that are owned by many small farmers. This structure makes it difficult for potential buyers or renters to track down owners, many of whom no longer live in the countryside.  Many of the younger land owners who have inherited property and have little background or interest in agriculture have moved away, leaving their property to sit idle. Low land taxes contribute significantly to this scenario, allowing owners to let their fields lie fallow without much concern to renting them out to other farmers.  Another apparent observation was the very large differences seen between adjacent fields. Some were overrun with weeds while other fields were in nearly ideal condition.  We were told that a large part of this difference could be attributed to field management.

Farm Structure
One of the disadvantages faced by the many small-scale Romanian farmers is the lack of on-farm storage space, forcing them to sell the crop at the end of harvest when prices are at their lowest.  Perhaps the most pressing concern for these farmers is attaining financial assets to begin operations in the fall.  The more competitive farms include the previously state-run cooperatives. These entities have now been transformed into private companies (and some state-run research institutions) with large fields (hundreds or thousands of hectares), and advanced technologies and management practices. These large producers provide the bulk of the grain production destined for market. They also typically enjoy stable and reliable financial resources; allowing them to plan ahead and prepare for problems that arise.

Serbia 

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Summary

Serbia is one of Europe's largest corn and wheat producers outside the European Union.  Corn production for 2009/10 is estimated at 6.4 million tons, up 8 percent from last year while wheat production is estimated to have been 2.1 million tons, similar to the 2008/09 harvest.

While the rain that fell during grainfill for corn (June/July) increased yield potential for the country's most important crop, the rain also deteriorated the quality of wheat at harvest. Interestingly, one of the biggest challenges facing the Serbian wheat industry is that it still does not grade wheat for quality; it is using the same criteria as it was in 1962. The crop is mixed together at the storage sites. Preliminary plans continue for setting-up a national grading system to classify wheat, but much work remains ahead to achieve this objective. The positive fall-out from this system would likely be better field management practices and increased milling-grade wheat.

Land in Serbia is highly productive and intensively cultivated. In addition, farms have been gradually getting larger and thereby increasing scale efficiencies.  All of the country's corn and sunflower are sown with certified seeds while wheat and barley are estimated to be comprised of 50 percent certified seeds. This is largely a result of the well known Serbian agricultural research institutions which produce high quality hybrids (particularly corn and sunflower) for Serbia and many other countries. 

Serbia typically produces more corn than it consumes, exporting to neighboring countries. It often finds itself competing with regional corn producers Russia, Ukraine, Romania and Hungary.  The significant area of idle farm land that exists in Romania and Bulgaria is not found in Serbia; land was observed to be fully utilized.

Crop Production in the EU:

For additional charts, please follow the links for: Wheat; Barley; Rapeseed; and Sunflowerseed.

Note that these charts represent official USDA crop production as of the October 2009 release.  November data will be available on November 10th on the FAS website, accessible by following the link from IPAD's home page:   http://www.pecad.fas.usda.gov/

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