USSR: PROSPECTS FOR GRAIN PRODUCTION AND TRADE AT MID-JUNE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000500160004-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 12
• Document Creation Date: December 9, 2016
• Document Release Date: August 2, 2000
• Sequence Number: 4
• Publication Date: June 1, 1975
• Content Type: REPORT

7 ~ F~-q~d'For Release 200/Q~'~ CIR~~T006D8RD00500160004-7
for Grain Prod'. and
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Confidential
USSR: Prorpectr >~~r Grain Production
and Trade at Mid- junc
Confidential
ER IB 75.4
Juno 1975
Co 0
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Unauthorized Disclosure Subject to Criminal Sanctions
Claui/led by 01319
Exempt from Genoral Decl~crificatlon Schedule
of E.O. 11632, exemption cu teporyi
?30(1), (2), and (9)
Automaticallyy decln~~l led om
dole lmpouible fo detsrm(ne
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USS[2: PROSPECTS FOR GRAIN PRODUCTION AND TRADE
AT MID-JUNE
Summary
1. Drought in parts of the USSR's spring grain area has reduced the
estimate of this year's crop to 215 million metric tons, 5 million tons less
than our earlier forecast.
2. Conditions in m~~t of the European USSR -- the major winter
grain area -- are good to excellent, and we expect a record winter grain crop
of about 70 million tons. The outlook for sprir~g grains remains mixed.
Because of high moisture levels, record spring grain yields are likely in parts
of the eastern New Lands area and in western Siberia. In the Volga valley,
southern Urals, and western Kazakhstan, however, soil moisture is seriously
low. Estimated yields in these areas have declined to three-fourths of the
long-term average. Our forecast of a spring grain crop of 145 million tons
assumes that the drought will break soon. If not, spring grain yields and our
estimate of the Soviet crop will be reduced accordingly.
3. The Soviets may purchase about 5 million tons of grain in the
next several months for deli~~ery in fiscal year (FY/ 1976, even though the
current estimate of the harvest exceeds total requirements by about 5
million tons. Imports may be needed to cover shortfalls in corn for the
livestock program and in high-quality milling wheat.
Discussion
25X1 Aga
Introduction
4. By early June, spring grain sowing operations were drawing to a
close, and the winter grain harvest was just beginning. Weather during late
Note: This publication was prepared by the Office of Economic Research.
It incorporates materials and analysis supplied by the Environment Analysis
Staff of the Office of Geographic and Cartographic Research. Comments
and ueries re ardin this ubli n are welcomed and may be directed to
of the Office of Economic Research,
o e , xtension 5107.
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June 1976
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April and May favored crop development in the wester n and eastern portions
of the Soviet Union but reduced yields in the central portion. This
publication uses weather data through the end of May and collateral data
available in mid-June to describe weather and crop developments during the
spring, to update earlier estimates of the size of the 1975 Soviet grain crop,
and to discuss the likelihood of Soviet grain imports.
Status of the Grain Crop
5. In most of the European USSR (the major winter grain area) and
the eastern part of the New Lands (where spring grains predominate)
conditions are fair to excellent for the grain crop (see Figure 1). In the
Volga valley, which grows both winter ar, ~ spring grains, and in the spring
grain areas of the southern Urals, western Kazakhstan, and Kustanay, a
prolonged drought has seriously lowered soil moisture. Yields in these areas
have already been reduced and will shrink further unless the dry spell is
broken.
Winter Grains
6. Throughout the past winter and spring, conditions in most of the
winter grain areas have been favorable. Plants wintered well, and an early
spring promoted growth. Cumulative precipitation from September through
May was about normal. During April and early May, the eastern Ukraine,
the non-black soil zone, and parts of the central region began to dry out. In
late May, however, rains fell throughout most of the area, replenishing soil
moisture and providing the basis for record or near-record yields. Observ-
ations during alate-May trip through the Ukraine by the US agricultural
attache stationed in Mo.;cow confirmed that conditions were good to
excellent.
7. The Volga valley is a proble~~~ area. Precipitation during April
and May was much less than normal, and soil moisture reserves are low.
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Soviet Grain Prospects at the End oS May 1975*
WINTER ' >~xcellent ;
`~ SFRIIVG GRAINS
,;~,
Nolc: Thin map was basad in pad on matodol and annlysie providod by lho
Envircnmont Analysis Stslf of Ihs Ollico of Ooogmphic and Cartographic Rnsoarch. CONFIDENTIAL
566241 6-7;, ciA *Shaded areas account for H2% of total grain production.
This area normally accounts for about 2-1/2 to 3 million tons of winter
grain, or about 5~6 of the winter crop; yields in this area are down, probably
one-fourth to one-third below average.
33. On balance, however, conditions are excellent, and we expect a
record winter grain crop. The harvest -- which will eventually cover ~0
million hectares -- has just begun in the south. !barring unexpected
harvesting difficulties, a winter crop of about lO million tons should result,
6-112 million tons greater than the record posted in 1973.
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5,prin~ Grains
9. Weather in the spring grain area has created two distinctly
different situations. In parts of the eastern New Lands area and western
Siberia, where moisture levels are better than normal, record yields are
likely. Yn the Volga valley, southern Urals, western Kazakhstan, and
Kustanay, however, soil moisture is critically low. Cumulative precipitation
from September through May illustrates the disparity in moisture conditions
between the two areas,l as follows:
10. The drought- stricken areas
were dominated during much of April and
May by a stationary high pressure system
centered between the Caspian and Aral
Seas. The clockwise movement of air
around this system brought hot, dry
winds from the deserts of Central Asia
into the Volga valley, western
Kazakhstan, and, at times, the e:~stern
Ukraine. This high pressure center
effectively blocked the movement of
precipitation-bearing !ow pressure sys-
tems into these areas (see FiP;ure 2).
1962/74 annual
average
1971J72
1972/73
193/74
1974/75
Central
Remaining
Spring
Spring
Grain Arca'
Grain Arca
238
222
244
254
245
227
2G4
247
1GG
224
1. Including the middle and lower Volga valley,
southern Urals, western Kazakhstan, and Kustanay.
This area nccounts for roughly one-fourth of file
area sown in spring grains and one-fourth of spring
grain production.
11. Sowing began earlier than usual this year. The mild winter led to
less-than-normal winterkill and resowing, while the early spring helped
fieldwork. Although well ahead of normal by the end of April, the sowing
pace slackened in early May (see the table). In the Baltic republics and the
eastern part of the 1`dew Lands area, rain hampered sowing; in the rest of the
New Lands, planting wr~s delayed by dryness. Nevertheless, by 9 June, 95.1
million hectares of spring grain were sown, and the plan for spring wheat and
corn pla-ltings was overfulfilled.
1. Precipitation in each spring grain area is weighted by its share of the
total area sown in spring wheat.
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Major Weather Patterns During May 1975
Molat Wlnds
WINTER
GRAINS
,~,.. Boundary of Grain Arao
USSR: Progress in Spring Grain Sowing
1. Excluding corn; state and collcctivc farms only.
2. Excluding corn; state and collcctivc farms as well as private holdings and other state enterprises.
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12. At this early date, a good spring grain harvest seems likely.
About 100 million hectares of spring grain, including 4 million hectares of
corn, will be harvested this year. Despite the dry conditions in parts of the
spring grain area, we expect a yield of 14.5 centners per hectare --above
average but slightly below the trend in yields since the mid-1960s, as
follows:
centners
per
Hectare
Crntners
per
Hectare
1964-74 annual
average
12.7
1970
14.5
1971
13.7
1966
12.8
1972
13.3
1967
11.0
1973
15.9
1968
13.3
1974
13.7
1969
12.6
1975 (est.)
14.5
Increased yields in recent years have been due in part to greater plantings of
spring barley, a higher yielding feed grain. In 1970, spring barley occupied
22% of the spring grain area and accounted for 15% of spring grain
production. By 1974, barley accounted for 30% of the spring grain area and
39% of production. The shift to spring barley is believed to have continued
in 1975.
Production
13. With a record 70 million tons of winter grain and an above-
average spring grain h:lrvest of 145 million tons, total production would
amount to 215 million tons, 5 million tons less than our April forecast. The
expected harvest falls between the 1973 record production of 222.5 million
tons and last year's second-best crop of 195.6 million tons and would
approximate the Soviet production plan of 215.7 million tons.
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14. This estimate is necessarily preliminary.2 Dryness in parts of
the spring grain areas during May has already reduced the crap by 5 million
tons. There was little precipitation in these areas during the first 10 days of
June because of a stationary high pressure system in the lower Volga valley.
Within the next month, spring grains will be heading, a crucial period of crop
development. Unless rain falls in the drought-stricken areas by then, yields
will be cut fur?tiier. In addition, the size of the winter crop is not yet
certain, because the harvest has just begun. This year's lush growth could
cause more lodging than usual, complicating the harvest.
Im orts
15. At 215 million tons, the grain crop would exceed estimated
Soviet requirements of about 210 million tons. Moreover, stocks at the end
of 1974 were at near-record levels, and another bumper harvest would strain
already limited storage facilities. Therefore, Moscow would not need to buy
large amounts of grain in the world market.
16. So far this year, the Soviets have -iot bought any grain, although
deliveries contint+ed under old contracts. The only Soviet grain transactions
in 1975 have adjusted contracts made in 1974. In January and February, the
USSR canceled some US and foreign contracts and switched some contracts
from one grain to other grains to take advantage or price changes. In
addition, the sale of 250,000 tons of US corn was canceled in May because
the quality failed to meet Soviet standards. In the first half of 1975, an
estimated 4-1/4 million tons of grain will be delivered under these old
contracts. This will bring total imports for FY 1975 to about 6-1/2 million
tons --about that needed to cover requirement shortfalls from the 1974
harvest.
17. Forecasts of Soviet grain imports are highly uncertain because
the link k~etween the harvest and imports is tenuous. A variety of other
2. On the basis of the descriptive ability of the weather/yield relationships
employed (using weather through May), there is one chance in six that grain
production will be below 200 million tons and one chance in six that the
harvest will be above 230 million tons.
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factors -- the desire to stockpile, requirements for particular types of grain,
demands for grain from client states, availability of other kinds of livestock
feed, and world grain prices -- enter into the determination of Soviet grain
purchases. In years following clear harvest failures (1963, 1965, and 1972),
large amounts of grain were importeo,. In other years, imports were not
correlated closely with domestic production.
18. In FY 1976 the USSR, however, is likely to buy perhaps 3 million
tons of corn and 2 million tons of wheat to cover shortfalls in certain types
of grain -- even if the harvest turns out to be 215 million tons. The
livestock program, for example, requires large quantities of high-energy
feed grains, such as corn, that cannot be grown domestically in sufficient
quantity. Also, if the drought reduces spring wheat yields, the Soviets may
import some high-quality durum wheat. A flurry of purchase rumors
surrounded the May visit to the United States of an official of Eksportkhleb
(the Soviet grain trading agency), but he returned to Moscow after only
cursory discussions with the major grain companies.
19. On the basis of past behavior, most buying would be carried out
this summer and in early fall. During 1971-74 the largest purchases were
made in July and August, with smaller amounts bought in September -
November (see Figure 3). Grain prices probably will be relatively attractive
in the coming months, a result of a bumper US crop and generally good crop
conditions throughout the world. In the United States, July wheat futures
fell below $3 per bushel in the first week of June, compared with a high of
more than $5 per bushel set in October 1974 and more than $4 per bushel the
previous June.
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Soviet Grain Purchases, by Month*
Million Mofric Tons
J F M A M
0.75
~~,, f1
J A S 0
8.78
01 i ('i F' ~ ~ 0,5 4 i
~~
1 r
J F M A M J J
0.2
J F M A M 'J~ J
0.4
-~~?,
0,1
148
~'-