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Commodity Intelligence Report
May 10, 2012

Ukraine Trip Report:  Fall Drought Reduces Winter-Crop Prospects for 2012/13  

Analysts from the USDA Foreign Agricultural Service traveled throughout central, eastern, and southern Ukraine in mid-April to examine winter-crop conditions and conduct interviews with crop producers, agricultural officials, and private commodity analysts. The team observed that the majority of wheat fields in eastern and southern Ukraine showed signs of poor germination and establishment resulting mostly from excessive fall dryness. Winter rape and winter barley fields in southern Ukraine were in especially poor condition. Evidence of frost damage was evident in some fields, but damage was localized and limited largely to areas within fields where strong wind had removed snow cover and dormant crops were left unprotected from low temperatures. Early-spring conditions were beneficial for the development of winter crops as they broke dormancy and resumed vegetative growth in March, with cool weather and adequate surface-soil moisture. The favorable spring weather, however, is unlikely to fully compensate for the weak winter-crop conditions that resulted from the severe fall drought. Wheat production for 2012/13 is forecast to drop by over 40 percent from last year, to 13.0 million tons.

Excessive Fall Dryness

According to the State Statistical Committee of Ukraine, approximately 9.4 million hectares of winter crops were planted last fall, including 6.7 million wheat, 1.37 million barley, 0.32 million rye, and 0.96 million hectares of rape. Ukraine’s winter crops suffered from the most excessive and persistent fall dryness in living memory, according to local farmers and other agricultural specialists. Surface-soil moisture was in short supply throughout eastern and southern Ukraine beginning in late August and continuing throughout September, October, and November. Conditions were similarly dry in western Ukraine. Only in north-central Ukraine did crops benefit from timely precipitation, although this moisture came in the form of only one substantial rainfall event in early October. Most farmers were forced to plant into dry soil with the hope that subsequent "savior" rain would enable the crops to emerge and develop.

Satellite-derived vegetative indices (NDVI) indicate that winter-crop conditions in late November were significantly worse than normal throughout the main winter-wheat production region of north-central, southern, and eastern Ukraine. December temperatures were generally above normal, which enabled winter crops to continue vegetative growth later than usual, but temperatures dropped suddenly and sharply in January and winter crops entered dormancy in unusually weak condition. A January assessment report from the Ukrainian Ministry of Agricultural Policy confirmed the poor conditions indicated by the NDVI; the Ministry estimated that 4.8 million hectares (57 percent of the reported sown area) was in good or satisfactory condition and 2.3 million (24 percent) in weak condition, with an additional 1.3 million (19 percent) that had failed to emerge. These values remained largely unchanged for the remainder of the winter.

February Frost Damage

Although minimum daily temperatures occasionally dropped to record lows in parts of Ukraine during late January and early February, snow cover in most areas was sufficient to protect winter crops from severe or widespread damage. Temperature and snow-depth data from the Hydromet Center indicate that significant but localized frost-related losses occurred in parts of north-central, central, and south-central Ukraine where snow cover was shallow and bitter cold persisted for an extended period of time. Losses also occurred in fields where strong wind redistributed the snow, leaving parts of the field with adequate protection and other areas of the same field vulnerable to the low temperatures. Damage was exacerbated by the weak condition of winter crops as they entered the winter. The USDA estimates that about 25 percent of the reported fall-planted winter-wheat area will be lost to the combination of fall dryness and frost damage. Rye is the most cold-tolerant of Ukraine’s winter crops and losses are not expected to exceed 5 percent, but the combined impact of fall drought and winter frost will likely drive the losses to 60 percent for winter barley and even higher for winter rape.

Field Observations

Although there was no such thing as a typical field, the USDA team observed that many fields were marked by uneven emergence, consistent with the severe fall drought. Some but not all farmers interviewed by the team in eastern and southern Ukraine voiced concerns about a lower-than-average number of tillers per plant and indicated that yield prospects in April were below average. The condition of winter crops varied widely from field to field and depended on a variety of factors, including planting date, the date of the first significant autumn rain, crop rotation, and technology (especially the use of reduced-tillage methods).

Winter rape and barley incurred the highest drought-related losses but for different reasons. For rape, the low survival rate was due in large part to its early planting date. It is the first of Ukraine’s winter crops to be sown, and 60 percent of this year’s planted area was already in the ground by the beginning of September, when the prolonged drought was still in its early stages. In many fields the plants had sufficient surface moisture to germinate and emerge but not enough to sustain growth, and the crops perished before rain finally arrived months later.  

Winter barley, meanwhile, was a victim of geography. Nearly the entire crop is grown in extreme southern Ukraine, in the territories bordering the Black Sea where the dryness was most severe. A grain specialist at a large enterprise in Nikolayev oblast estimates that 80 to 90 percent of the region’s winter-barley fields were in extremely poor condition in mid-April due to a near-total lack of surface moisture. Although winter-barley output will be substantially reduced from last year, winter barley typically accounts for less than one-third of total barley production.

Winter wheat in south-central Ukraine fared better than winter barley, but not by much. According to a specialist in Nikolayev, about 50 percent of all the winter grains in the oblast did not emerge at all, and wheat accounts for about 60 percent of the sown winter-grain area in Nikolayev. Conditions were even worse in neighboring Kherson oblast; the team observed noticeably fewer winter-crop fields in Kherson than in any other oblast along the route. The poor conditions were not confined to south-central Ukraine. According to experts at Ukraine Hydromet Center, about 80 percent of the winter crops in Dnipropetrovsk oblast failed to emerge in the fall.

While traveling through eastern and southern Ukraine, the team observed some winter-wheat fields in outstanding condition. The excellent emergence and establishment of a particularly good wheat field in Zaporizhia oblast was attributed by the farmer to the fact that this year’s wheat crop is following a year of clean fallow (during which no crop is planted in order to enable the soil to replenish its soil-moisture reserves). In other fields, winter crops benefited from reduced-tillage practices that left intact much of the residue from the previous year’s crop. Farmers utilizing this technique maintained that the residue helps reduce evaporation of surface moisture.

The most vigorous winter grains along the route traveled by the team were observed between northern Odessa oblast and Kyiv (Kiev) oblast. This was consistent with the assessment of a specialist at the Bila Tserkva Wheat Selection Institute near Kyiv and with local agronomists who reported that the country’s best winter-crop conditions this year are in Kyiv, Cherkassy, and Kirovograd oblasts in central Ukraine. Although overall autumn precipitation was significantly below normal in these territories, the region received one generous rain in early October. Winter-grain fields that had been planted prior to the rainfall were able to benefit from the timely precipitation, while wheat planted after the rain did not have adequate time to become fully established prior to winter. The majority of the region’s farmers, however, reportedly planted before the rain arrived.

Beneficial Early-Spring Conditions

Winter grains that survived the fall dryness and bitterly cold winter benefited from the cool, moist April weather that stimulated the formation of additional tillers and secondary rooting. These favorable conditions will compensate in part for the late fall emergence described by farmers and the low tiller formation observed by the team. Even with the favorable spring weather, however, the potential yield of Ukraine’s 2012/13 winter grains is likely to be reduced significantly by the remarkably poor fall conditions. The 2006/07 crop serves as a useful and fairly recent comparison. The autumn of 2005 (when the 2006/07 winter grains were planted) was marked by unusually dry conditions, although not nearly as severe as the dryness of 2011. Early spring conditions were favorable – cool and moist – and the weather during May and June of 2006 was outstanding, with generous but not excessive precipitation. Final wheat yield, however, was reported at 2.53 tons per hectare, the third-lowest yield since 2000. Considering the remarkable severity of the drought during the autumn of 2011, and assuming that subsequent weather is unlikely to be more favorable than the excellent May and June weather of 2006, it would seem unlikely that winter-grain yield for 2012/13 will match the yield of 2006/07. Although the level of agricultural technology (especially fertilizer-application rates) has improved steadily during the past decade, weather remains the most important yield determinant. The USDA forecasts wheat yield for 2012/13 at 2.45 tons per hectare, down only 3 percent from the yield of 2006/07.

Vegetative Indices

Satellite-derived vegetation indices (NDVI) through late April indicate that winter-crop conditions vary throughout Ukraine. The NDVI from most oblasts in eastern and south-central Ukraine (including Poltava, Kharkiv, Dnipropetrovsk, Zaporizhia, Kherson, Crimea, Nikolayev, Odessa, and Kirovograd) are quite low compared to most of the previous eleven years. Conditions are better in Donetsk and Luhansk oblasts in easternmost Ukraine, and in north-central Ukraine (Cherkassy, Vinnitsia, Zhitomir, and Kiev). but NDVI in these regions are average at best. The NDVI from late May and early June will provide the best indicator of potential wheat yield, and the USDA will continue to monitor yield prospects based on the latest data and crop conditions.

Production Forecasts for Winter Crops

Since winter wheat accounts for about 95 percent of Ukraine’s total wheat output, prospects for 2012/13 wheat production are down sharply from last year. The USDA forecasts output at 13.0 million tons, down 41 percent from last year’s 22.1 million. Harvested area is estimated at 5.3 million hectares, down 1.4 million from last year.  Ukraine’s entire rye crop is winter rye.  Rye is the most hardy and frost-tolerant of Ukraine's winter crops and is grown mainly in northern and western Ukraine where deep snow provided adequate protection from the low temperatures.  Winter losses for rye were low compared to other winter crops but fall establishment conditions were quite dry, and yield is forecast to decrease by about 20 percent from last year.  Rye production is forecast estimated at 0.45 million tons compared to 0.55 million last year. Total rapeseed production is forecast at 0.7 million tons, down over 50 percent from last year’s output of 1.5 million. Winter rapeseed typically comprises about 90 percent of the country’s rapeseed crop. Although winter-barley output will be substantially reduced from last year, winter barley typically accounts for less than one-third of total barley production. The USDA does not estimate winter-and spring-barley individually. (See discussion of spring-barley prospects and estimated total-barley production forecast below.)  Note that USDA crop-production estimates are based on current conditions and the assumption of normal weather during the remainder of the season. Conditions will be monitored closely throughout the growing season and revised if necessary.

Spring crops
The high losses of winter crops this season will result in an increase in the area of spring-sown crops. Farmers and private commodity analysts indicate that corn, sunflowers, and soybeans are especially attractive options this year. As of May 3, the planting of early spring grains (barley, wheat, oats, and pulses) was essentially finished, and the planting of sunflowers and corn was roughly half complete.

The USDA estimates 2012/13 total-barley area at 3.6 million hectares, down slightly from last year, and production at 7.5 million tons, down 18 percent from last year. Yield is forecast at 2.08 tons per hectare, 8 percent below the five-year average due to a late start to the spring sowing campaign. Historical yield and planting-progress data suggest that spring barley yields tend to be lower in years marked by late planting. Winter-barley yield is also forecast at below-average levels following the combination of dry fall weather and frost damage.

Sunflowerseed production is forecast at 9.5 million tons, matching last year's record. Harvested area is estimated at a record 6.0 million hectares, up 0.2 million from last year. Sunflower area has increased almost without interruption since 2001 despite the best efforts of agricultural officials to restrict the planting of sunflowers due to concerns about soil-borne fungal diseases. Recently-instituted government regulations require that sunflowers occupy no more than 30 percent of total planted area, but most specialists do not expect the sanctions to have a significant effect on farmers’ planting decisions because of the crop’s consistently high profitability. Most farmers, however, guard against excessively frequent planting of sunflowers (in the same field), and balance profitability with crop-rotation constraints.

(Note that sunflowerseed is the only crop for which the USDA diverges from the final area and production data published by the State Statistical Committee of Ukraine, whom the USDA regards as the most reliable and authoritative source of agricultural statistics. Most private commodity analysts agree that Ukrainian farmers regularly under-report the sown area of sunflowers, and by a significant amount. For example, the USDA estimates the actual harvested area of sunflowers for 2011/12 at 5.8 million hectares, 1.2 million higher than the officially reported area.)

Ukraine corn production exploded last year, with output nearly doubling the previous record set only the year before, and agricultural officials and independent analysts are expecting a huge jump in corn area for 2012/13. The USDA forecasts production at 24.0 million tons, surpassing last year’s record by 5 percent. Harvested area is estimated at 4.5 million hectares, up 1.0 million from last year. As reported by the U.S. agricultural attache in Kyiv, planted area will soar in response to continued high export demand combined with increasing domestic demand from poultry and pork producers. Yield has been increasing since 2000, coincident with the steady improvement in agricultural technology, especially an increase in the use of hybrid seed. Yield for 2012/13 is forecast at 5.33 tons per hectare, down 17 percent from last year’s remarkably high yield but still the second-highest on record.

Interviews with crop producers from both large agricultural enterprises and relatively small farms provided insight into the changes in farmers’ approaches to planting decisions that have been occurring in recent years. Farmers acknowledged that crop selection is determined chiefly by profitability rather than strict adherence to conventional crop rotations. The team repeatedly saw evidence of wheat being planted the year immediately after sunflowers, a crop sequence that would have been highly unusual five to ten years ago. Farmers are experimenting with methods such as reduced tillage, which, despite widespread use in many parts of the world, are still gaining a foothold in Ukraine and Russia due in part to the sometimes prohibitive cost of dedicated reduced-tillage machinery. As indicated by the continued expansion of sunflower area, farmers are striving to strike a balance between profits and proper land management.

The valuable contribution of Yulia Dubinyuk, agricultural specialist at the USDA attache office in Kyiv, is gratefully acknowledged.

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

For more information contact Mark Lindeman | | (202) 690-0143
USDA-FAS, Office of Global Analysis

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