World wheat production down, led by Australia

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World wheat production in 2012/13 is projected down 1.6 million tons to 651.4 million, which is 44.6 million tons lower, compared with the previous year, and foreign wheat production is down 52.0 million tons on the year. This is the largest year-to-year drop in world wheat production since 1991/92, and the largest drop for foreign production on record. Several major producers – three Former Soviet Union (FSU) countries (Russia, Ukraine, and Kazakhstan), Australia, and EU-27— account for the production decline.

Adverse weather conditions affected the average world wheat yield this year, with a decline of 4.5 percent on the year (5.4 percent down for foreign countries). Also, despite relatively favorable world prices during planting in 2012/13 when price incentives should have maintained the area level in most parts of the world, USDA data show a year-to-year decline in world wheat area of 4.4 million hectares, or 2.0 percent (5.8 million hectares decline for foreign countries, or 2.8 percent of foreign wheat area).

This can give an impression that lower planting intentions are partly responsible for this year’s wheat production decline. However, the decline in area numbers refers to harvested, not planted, area, as USDA maintains data on area harvested only, and not on area planted for crops in foreign countries. Therefore to a nontrivial degree, declining world and foreign wheat area this year is also a result of adverse weather that prevented planting and/or increased abandonment.

The largest reduction in 2012/13 wheat production this month is for Australia, down 2.0 million tons, to 21.0 million. Dryness persisted into October in parts of both eastern and western growing regions, further reducing yield potential in Western Australia, southern New South Wales, and parts of Victoria. Moreover, light and patchy October rains came too late to enhance production prospects of wheat, which was already beyond its reproductive period and in the final stages of maturity, ready to be harvested.

Wheat production for 2012/13 is projected down 0.25 million tons to 15.5 million in Turkey, where the wheat harvest is completed. Yields are lower than expected for the delayed crop that suffered through cold and overly wet conditions in the Central Anatolian Plateau driving the total wheat yield in the country to a 9-year low.

Partly offsetting are small increases projected for EU-27 and Pakistan. EU-27 wheat production for 2012/13 increased slightly this month, up just 0.25 million tons, as reported increases for Poland, Greece, Austria, Bulgaria, and Denmark more than offset reductions for the United Kingdom (UK), Germany, France, Sweden, Belgium, and the Netherlands.

Based on the latest report from the Polish statistical office, wheat production in Poland is projected higher by 0.75 million tons, with reduced area and higher yields. Despite adverse weather conditions, the crop did better towards the end of the growing season, though both yields and production are projected lower than last year. Wheat production is also up for Greece and Austria (0.3 million tons each), Bulgaria and Denmark (0.2 million tons each).

Those increases are partly offset by a further reduction of projected wheat output for the UK, down 0.5 million tons, with the second wettest summer on record in a 100 years. Production is also projected lower for Germany (down 0.4), France (down 0.3), Sweden, Belgium, and the Netherlands (down 0.1-0.2 each). Smaller revisions are also made for a number of other EU-27 countries. In Pakistan, where the wheat harvest was completed in April, wheat output is adjusted up 0.3 million tons following official reports.

The wheat crop for several former Soviet Union (FSU) countries were adjusted, with small increases for Azerbaijan and Tajikistan more than offsetting a decline for Moldova. A small upward adjustment is made for Algeria, while offsetting downward adjustments are made for Bangladesh and Mexico.

Source: Wheat Outlook

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