Russia’s drought damage will extend into the coming crop, says a high ranking government official.
Viktor Zubkov, Russia’s first deputy prime minister, forecast 29.6 million acres of winter grain in 2010, down from 45.7 million acres in each of the last two years.
That would be the equivalent of losing this year’s entire Canadian wheat area.
Jerry Norton, grains analyst with the United States Department of Agriculture’s World Agricultural Outlook Board, said Russia might be jumping the gun.
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Winter cereal seeding starts in late August in the north and can continue well into November in southern Russia, so there is still time for rain to replenish its parched soils.
“It’s a little too early to cut into the likely acreage on winter wheat in Russia because it can turn around fairly quickly,” he said.
Bruce Burnett, director of weather and market analysis for the Canadian Wheat Board, said winter wheat plantings will likely contract.
“The magnitude of it is up for debate,” he said.
He noted that Zubkov was talking about all winter cereal plantings, about three-quarters of which would be wheat. The biggest winter wheat area is in the south, where there will be more time for recovery.
But if conditions don’t improve, there could be lasting implications for a country that tied with Canada as the world’s second largest wheat exporter in 2009-10.
“It would be a significant deal,” said Burnett.
Russia’s wheat exports will be minimal in 2010-11, three million tonnes, down from 18.5 million tonnes in 2009-10 and 18.4 million tonnes the previous year, according to USDA figures. The bulk of that three million tonnes already moved between the July 1 start of the crop year and the implementation of the grain export ban on Aug. 15. That ban extends to Dec. 31 but Norton said no wheat will be shipped out after that date anyway.
“Really, we’re not expecting them to be a major exporter whether there’s a ban or not,” he said.
Russia lost a significant amount of corn, barley, oats and rye in the drought. The government is committed to expanding its swine and poultry production, which means it will divert more domestically produced wheat into livestock rations.
If the winter grain crop shrinks as much as government officials expect, there will be trouble on the horizon.
“They really will be facing some significant issues next year domestically if they don’t recover in terms of production,” said Norton.
“They’ll have to import grain or they’ll have to liquidate herds and
The Black Sea region will export less wheat this year but traditional exporters – The United States, Australia and Argentina – are holding supplies that are sufficient to compensate for the shortfall, said USDA. U.S. ending stocks at 26 million tonnes are three times larger than just a few years ago.
flocks from their livestock and poultry sections.”
Norton said growers can plant those acres in the spring instead, although winter wheat yields are double those of spring wheat.
Burnett said shifting acreage to spring 2011 from winter 2010 would prolong potential recovery.
“It puts a lot of pressure on next year’s spring wheat production,” he said.
