SOVIET GRAIN IMPORTS: ASSESSING THE FACTORS AT PLAY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84S00558R000100140002-7
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 20
• Document Creation Date: December 22, 2016
• Document Release Date: January 7, 2011
• Sequence Number: 2
• Publication Date: February 1, 1983
• Content Type: REPORT

Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Directorate of l-
Intelligence
Soviet Grain Imports:
Assessing the Factors
at Play
GI 83-10028
SOV 83-10026
February 1983
Copy 4 3 8
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Soviet Grain Imports:
Assessing the Factors
at Play
This paper was prepared by the Office of Global
Issues and the Office of Soviet Analysis. Comments
and queries are welcome and may be directed to
the Chief Commodity Markets Branch, OGI, 0 7! X1
or to the Chief, Soviet Economy Division, 25X1
SOVA 25X11
G/ 83-10028
SOV 83-10026
February 1983
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Secret
Soviet Grain Imports:
Assessing the Factors
at Play F__]
Key Judgments Moscow seems intent on minimizing purchases of US grain. Despite sizable
Information available purchases on the world grain market in recent months, the Soviets have
as o./ II February 1983 bought only about 6 million tons of grain from the United States during the
was used in this report.
marketing year that began last July. They may not buy much, if any, more
US grain in the marketing year. In these circumstances the United States
would account for about 10 percent of total Soviet grain purchases,
compared with 50 to 60 percent in the late 1970s before the US grain em-
bargo was imposed following Moscow's invasion of Afghanistan.
In deferring purchases from the United States, the Soviet leadership is
probably expressing its anger over recent US trade policy and attempting
to encourage opposition within the United States to the future use of
sanctions. We believe the USSR is well positioned to minimize its
purchases of US grain, even in the marketing year that will end in June
1984. The tendency by major exporters to overproduce probably will persist
for at least another year and perhaps much longer. Moreover, long-term
grain agreements with non-US suppliers assure the Soviets access to about
10 million tons annually. Moscow has agreements with Canada and
Argentina and is exploring possible agreements with France and Australia
that could guarantee several million tons more.
Secret
GI 83-10028
SOV 83-10026
February 1983
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Secret
Food, Seed, and Industrial Use
Livestock Feed
Exports
Stock Changes
Import Requirements and Activity
Purchases
Shipments
The Next Six Months and the US Role
Looking Ahead
A.
B.
Survey of Recent Soviet Crop Estimates
Estimating Soviet Livestock Feed Needs
Soviet Logistic Constraints
9
11
13
USSR: Selected Grain Statistics 2
USSR: Exports of Grain 3
USSR: Grain Position in Marketing Year 1983 4
USSR: Grain Imports in MY 1982 and Purchases in MY 1983 5
Grain Shipments to the USSR in MY 1983 6
USSR: Feed Expenditures 12
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
USSR: Grain Production, 1976-81 1
USSR: Cumulative Grain Purchases 4
USSR: Cumulative Grain Shipments to USSR 6
USSR: Grain Shipments and Turnaround Time, July 81-August 82 8
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
25X1
Soviet G
Assessi
rain I
ng the
__
mports:
Factors
at Play
F
]
25X1
Grain Production
Since July 1982 we have been projecting a crop of
about 165 million tons-a fourth consecutive poor
harvest. Other sources have offered widely different
estimates (appendix A). Statements by Soviet officials
on last year's crop give ranges from 140 to over 200
million tons. In early November, for example, Minis-
ter of Agriculture Valentin Mesyats stated that the
crop would be 27 million tons larger than the 1981
harvest-unofficially placed at 158 million tons.
These statements may be misleading. In November
1981 Soviet grain trade officials indicated the crop
was more than 175 million tons but all subsequent
indications are for a far smaller crop. In addition to
Soviet statements, there have been numerous Western
estimates of the harvest. They have ranged from 163
to 185 million tons and include the USDA's estimate,
which was raised in November from 170 million tons
to 180 million tons.
In view of the wide range of estimates and the slow
pace of Soviet grain purchases early in the marketing
year (July-June), we have reexamined our own esti-
mate. The review included an evaluation of estimates
made by other forecasters and statements by foreign
officials, assessments of postharvest indicators such as
straw residue and state grain procurements, and the
use of an alternative methodology that looks at six key
grain producing areas.' The review failed to produce
evidence that would cause us to revise our estimate.
Because of the many variables involved, the figure of
165 million tons should be considered our best esti-
mate, but one subject to error. On the basis of the
track record of our methodology, there are two
chances out of three that the crop was in the range of
150-180 million tons and only one chance in 10 that
the crop exceeded 185 million tons.
Figure 1
USSR: Grain Production, 1976-81
Million tons
FstimutecP
Actualh
ai Cl:As estimate said thus the 1'151 h;nrse.t tt Mild he Irss
than 170 million tone
htinolllcinllc reported, the ollieial Sonic lair the 1'151
harNest has not been published Sr the l SSk
eCI \s estinude said that the ITS hanesl "Mild esceed
the previous record of 2215 million lens priduced in I`1'6
Requirements
We know less about the size of Soviet grain needs
than we do about the size of the crop because
requirements depend on Soviet intentions as well as on
the physical relationships in agriculture and food
processing. Nonetheless, determining requirements is
a vital step in solving the import puzzle. Sufficient
data exist to make reasonably reliable estimates of
Soviet use of grain for food, seed, and industrial
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Soviet Grain Requirements:
Changing Estimate
Table 1
USSR: Selected Grain Statistics
Earlier this year we estimated that the Soviets would
need upwards of 65 million tons of grain in excess of
this year's crop to meet their domestic needs. We
expected grain imports in the marketing year ending
next June to reach a record 50 million tons-the
limit of Soviet capacity to unload grain and transport
it internally. When Moscow bought grain at an
unexpectedly slow pace during July-September, we
reviewed the factors determining the level of expected
imports. As a result of this review we maintained our
estimate of the size of the 1982 Soviet grain crop at
165 million tons. Based on the accuracy of our past
estimates there are two chances in three that the crop
will be between 150 and 180 million tons. We are
nevertheless lowering our estimate of Soviet domestic
grain requirements by 23 million tons because the
harvest offorage crops was substantially greater than
we thought it would be. Largely because of this
change we have lowered our estimate of Soviet grain
imports to a maximum of 42 million tons-3 million
Production
Used for Food,
Seed, and
Industrial
Purposes
Percent Used for
Food, Seed, and
Industrial
Purposes
1972/73
168.2
89.7
53
1973/74
222.5
91.1
41
1974/75
195.7
90.3
46
1975/76
140.1
90.1
64
1976/77
223.8
92.1
41
1977/78
195.7
92.8
47
1978/79
237.4
92.9
39
1979/80
179.0
92.5
52
1980/81
189.1
92.8
49
1981/82a
158
92.6
59
1982/83 b
165
93.0
56
a Unofficially reported.
b Estimated.
tons less than were imported last year.
products, as well as exports. The estimate of grain fed
to livestock has a wider range of uncertainty because
the underlying data are incomplete and because policy
changes can have a major impact on the amount of
grain fed. The total secrecy surrounding reserves
makes estimates of grain stocks even more difficult to
make
Food, Seed, and Industrial Use. Even in years when
harvests are poor the Soviet Union produces more
than enough grain to supply its population with bread
and other grain products, replenish seed stocks, and
produce alcohol, beer, starch, and other secondary
grain products. Quantities of grain required for food,
seed, and industrial uses have increased slowly over
the past decade. We believe that our estimate of 93
million tons of grain for these purposes in MY 1983 is
accurate within a few million tons (table 1). The total
required for these purposes fluctuates primarily be-
cause of changes in seeding needs. Seed use depends
on sown area and the amount of reseeding because of
Livestock Feed. Livestock feed requirements have
always been one of the weak links in our estimate of
total Soviet grain needs. Their importance in the
requirements equation has been increasing as grain
used for feed climbed by nearly one-half during the
past decade. Early last summer we estimated grain
requirements for feed at 119 million tons, on the
assumptions that meat production in MY 1983 would
be somewhat higher than in MY 1982 and that grain
as a share of total feed would not change from last
year. On the basis of Soviet reports, we now believe
that meat production will not increase and that larger
crops of potatoes and forage will permit substantial
substitution of nongrain feed in livestock rations
(appendix B). We therefore now estimate grain feed
requirements in this marketing year at about 94
million tons with a range of uncertainty of at least
5 million tons.
winter damage.
25X1
25X1
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Secret
Table 2 Thousand tons USSR Grain Purchases and
USSR: Exports of Grain Hard Currency Availability
Europe
750
830
1,302
Vietnam
4
125
260
190
200
North Korea
247
212
400
300
300
Mongolia
56
20
80
8
118
Afghanistan
15
10
40
30
80
Other
This total includes grain purchased by the USSR from Western
exporters and shipped directly to the recipient.
Our assumption that meat production will not in-
crease represents a shift in our perception of Soviet
consumer policy. Earlier, we believed Moscow would
import as much grain as its ports could handle in
order to ensure an increase in meat production. The
Soviet leadership, however, apparently has decided to
forgo this objective by choosing to import grain at
below-capacity levels during July-December. The re-
duced level of imports also precludes additions to
stocks and could leave the USSR in a vulnerable
position if there is another shortfall.
Exports. Moscow's grain exports to client states have
fallen sharply from the 6-million-ton average of the
early 1970s-primarily in sales to Eastern Europe-
to roughly 2 million tons annually in recent years
(table 2). We believe that the USSR's commitment to
the political stability of its client states has forced
Moscow to continue Soviet grain exports-especially
to Cuba-at about the present level of 2.3 million
tons.
Stock Changes. Less is known about Soviet grain
stocks than any other aspect of the supply and
demand situation. The quantity held in reserve is a
The rapid deterioration in Moscows hard currency
situation during the first half of 1981 led to sharp
cutbacks in many imports in the latter part of the
year and into 1982.
Soviet trade organizations had little cash to
place new orders and some projects were suspended,
including those to obtain Western enhanced-oil-recov-
ery technology. Even grain apparently did not escape
the general Soviet clampdown on imports.
Efforts taken by the USSR since mid-1981 to correct
its hard currency balance of payments, however, have
put the Soviets in a much better trade and financial
position than they were in a year ago. Although the
foreign exchange situation is still tight, we believe
that the substantial improvement recorded during the
first half of 1982 coupled with the availability of
Western credits has given Moscow the ability to pat
for as much grain as Soviet ports and railroads can
handle in January-June 1983.
state secret. For purposes of estimating grain imports
this year, we assume that the USSR will not be able
to draw down grain stocks. After a series of poor
crops, there is probably little grain left in reserve to
compensate for this year's poor harvest.
Import Requirements and Activity
With a grain crop of 165 million tons, we estimate
that the USSR needs 42 million tons of imports this
marketing year to (a) support current levels of produc-
tion of meat and dairy products and maintain live-
stock inventories, (b) cover requirements for seed,
food, industrial use, and exports, and (c) maintain
stocks at current levels (table 3).
75X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Table 3
USSR: Grain Position in
Marketing Year 1983
981-82
1982-83(5-71,111)
Food, seed, and industrial
93
Livestock feed, excluding waste
94 5(I
Export
2
Stock change
Net production a
40
Import requirements
a The USSR reports grain production on a bunker weight basis
before cleaning and drying. To derive net production, we have
reduced this year's crop estimate by 11 percent for excess moisture
and for nongrain matter.
Purchases. After a slow first quarter, Soviet grain
buying has risen sharply. Purchases during July-
December for delivery by 30 June 1983 totaled
roughly 30-32 million tons,
? So far this year the Soviets have contracted for
6 million tons of US grain for shipment through
March.
? Moscow's announcement in mid-October of the
purchase of 7.6 million tons of Canadian grain
coupled with the reported December purchase of
I million tons of wheat brings total 1982/83 pur-
chases from Canada to 10.7 million tons.
? Purchases of Argentine grain now total some
7-9 million tons. This includes the purchases in
November and early December of 3.5-4.5 million
tons of new crop wheat from Argentina for delivery
beginning in late December, a reported contract
with an international grain trader to purchase be-
tween 1 to 2 million tons of new crop corn, and the
possible purchase of 500,000 to 1 million tons of old
z USDA estimates the current level of commitments at 26-27
million tons.
:1 This chart represents grain contr,icts signed IS,
the Sosicis during the marketing ccar It does
nut include grain purchased be IM e I Juir. hut
shipped to the I SSR during the marketing ~ cur
crop corn and sorghum. Moreover, 1.8 million tons
of old crop grain already has been delivered to the
USSR.
? The USSR has contracts for 6.5 million tons of
grain from Western and Eastern Europe, Thailand,
and Australia.
In addition to grain already purchased, commitments
under long-term grain agreements with Argentina
could provide the Soviets with another 2-3 million
tons of grain. Since the Argentine agreement is not
based on the marketing year, the USSR is not
required to take delivery before 30 June.
25X1
25X1
25X1
25X1 I
25X1
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
USSR: Existing Non-US Grain Agreements
Argentina (1 January 1980-31 December 1985)
-Authorizes the USSR to purchase from private
commercial firms 4 million tons of corn and sorghum
and 500,000 tons of soybeans annually.
-Purchases in excess of these quantities will be
authorized only after consultation.
-Purchases will be made at prevailing market
prices.
-Quantities stipulated in the agreement and addi-
tional amounts agreed upon will not be affected by an
embargo.
Canada (1 August 1981-31 July 1986)
-Authorizes the USSR to purchase from the Cana-
dian Wheat Board a minimum of 4 million tons of
wheat, barley, and oats in 1981/82. The minimum
commitment increases half a million tons a year to
reach 6 million tons in the fifth and last year of the
agreement.
-Quantities stipulated in the agreement will include
grain shipments to Cuba on Soviet account.
-Prices will be negotiated every six months.
-Quantities stipulated in the agreement will not be
affected by any restrictions imposed by the Canadian
Government. Unlike the Argentine agreement, addi-
tional amounts agreed to by both parties may be
subject to embargo
Brazil (1 January 1982-31 December 1986)
-Authorizes the USSR to purchase from private
firms and cooperatives a minimum of 500,000 tons of
soybeans and 400,000 tons of soybean meal annually.
-Beginning in 1983, approximately 500,000 tons of
corn will be exported to the USSR annually.
-Prices will be negotiated.
Shipments. Moscow has taken relatively small deliv-
eries (luring the first half of the marketing year. Grain
shipments during July-December probably totaled
about 13 million tons-8 million tons below the level
in the comparable period last year. Most of the
reduction has been at the expense of the United States
Table 4
USSR: Grain Imports in MY 1982 and
Purchases in MY 1983
1982/83 Imports -
1982/83 Purchases to
Date b
Total
45.0
30-32
United States
15.4
5.9
Argentina
13.2
7.0-9.0
Australia
2.5
1.0
Eastern Europe
1.5
1.5
1 July 1981 to 30 June 1982.
b I July 1982 to 31 December 1982.
Total does not add due to rounding.
and Argentina whose first-half shipments to the
USSR probably fell by more than 60 percent com-
pared with the same period last year. The Kremlin
may have reasoned that, with its greatest needs for
imports coming next spring, small purchases and 25X1
shipments during the summer could help conserve
hard currency and possibly force down world prices.
October-November purchases of US grain have accel-
erated shipping rates for November-December to
roughly equal last year's rate for the period. F_
The Next Six Months and the US Role
Moscow would have to take delivery of 29 million tons
during January-June if it is to import the 42 million
tons we believe it needs this year. The world grain
market can easily meet this requirement. Non-US
exporters should be able to supply about two-thirds of
Soviet needs during the remainder of the marketing
year. The United States would have to deliver about 9
million tons. If this happens, total US grain exports to
the USSR for the marketing year would amount to 1 1
million tons, 30 percent below last year's level. The
bulk of any additional US purchases would have to
occur during the next two months because of seasonal
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Figure 3
Cumulative Grain Shipments to USSR
Table 5
Grain Shipments to the USSR
in MY 1983
1981-82
_ 1982-83
shortages of grain in non-US exporting countries and
the Soviet need to prevent shipping bottlenecks that
could limit total grain imports for the marketing year.
If Moscow imports less than 42 million tons of grain
this year for whatever reason-including the possi-
bility that we have underestimated this year's crop-
the shortfall will come largely out of US sales. Given
all the variables at play in assessing import needs and
intentions, it is possible that the USSR will make no
additional purchases beyond the 6 million tons al-
ready bought.
In this connection, political considerations appear to
be playing a large role in Soviet import decisions.
Although the United States will probably be the
largest single source of grain for the USSR during the
Total for the year
31.0
11.0
42.0
First quarter (Jul-Sep)
5.2
0
5.2
Second quarter (Sep-Dec)
5.8
2.0
7.8
Total first half
11.0
2.0
13.0
Third quarter (Jan-Mar)
6.5
7.0
13.5
Fourth quarter (Apr-Jun) a
13.5
2.0
15.5
Total second half
20.0
9.0
29.0
January-March period, Moscow is probably also de-
termined to minimize purchases of US grain, even if
this leaves domestic requirements only partially met.
grain purchases from the United
States would be kept to an absolute minimum, and we
judge that these declarations should be taken
seriously:
? Moscow views the United States as an unreliable
trade partner, and despite Washington's recent offer
of increased grain sales and its lifting of the gas
pipeline sanctions, the leadership probably believes
that the United States still cannot be trusted. In late
November, for example, journalist and regime
spokesman Alexander Bovin said in Izvestiya that
"there can be no doubt" that Washington would
continue to push for limits on East-West trade.
? Soviet leaders probably also want to avoid appearing
dependent on US grain at a time when Washington
is seeking leverage through Soviet economic diffi-
culties. Although General Secretary Andropov and
Premier Tikhonov affirmed the desirability of in-
creased trade in recent speeches, they also said that
expanded purchases from the United States would
depend on whether the United States abandons
efforts to restrict commerce.
25X1
LJ/~ I
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84S00558R000100140002-7
Soviet capacity to offload seaborne grain and move it
to the interior by rail and inland waterway depends
on.,
? The rated capacities of grain offloading equipment
in Soviet ports, adjusted for weather, maintenance,
and labor constraints.
? The availability of grain railcars and inland water-
way vessels to accept offloaded grain and the
availability of grain storage facilities at the piers.
? Seasonal limitations on the use of the inland
waterways and other transport networks.
Appendix C describes in more detail the major
factors limiting port capacity.
Over the past few years, Moscow has been expanding
and improving its grain import capability. This en-
hanced capability will allow Moscow greaterflexibil-
Because of increased port capacity and the greater
availability of railcars for imported grain in the
spring, the surge in monthly shipments to a record 5.3
million tons in May 1982 caused much less port
congestion (as reflected in ship turnaround times)
than a weaker surge in the fall of 1981.
Given these developments, the USSR should have
little difficulty absorbing an average of 4.8 million
tons of grain per month from Januarv through June
1983, or 29 million tons during the second half of FY
1983. This, together with the estimated 13 million
tons shipped during July-December, will enable Sovi-
et imports to reach 42 million tons. Because the
availability of grain railcars will be at a peak
through May, import capacity probably will approach
the discharge capacity of USSR port equipment,
which demonstrated a capability to handle 5 million
tons a month in the spring of 1982. If new facilities
under construction at Novorossivsk on the Black Sea
are completed by the end of March, we estimate
transshipment activities in Western Europe, where
North American grain delivered by large bulk carri-
ers to Hamburg and Rotterdam is transferred to
smaller vessels for carriage to river and other shal-
low-river ports in the USSR.
? The USSR probably decided to ignore the October
offer of increased US grain sales in part to demon-
strate that trade limitations can be applied by both
sides, a longstanding public warning of Moscow's.
The Soviets know that US farm and business inter-
ests will then put increased pressure on Washington
to avoid imposing future sanctions.
The Soviet goal of reducing dependence on Western
grain may also be influencing Moscow's purchasing
decisions, but we doubt that it is a major consider-
ation. The food program launched earlier this year-
and still backed by Andropov-is partly intended to
reduce the USSR's reliance on foreign agricultural
commodities. That is almost certainly a secondary
25X1
25X1
discharge capacity could be as high as 5.4 million 25X1
tons per month. Beginning in June, however, unload-
ing capability may drop as railcars are diverted to
meet demands arising from the new harvest and other
factors.
and long-term objective of the program, however, and
the new leadership would be reluctant to cut imports
sharply in the first year of the program solely for that
reason.
To the extent that the USSR eschews US grain, it will 0
have to make internal adjustments-again assuming 25X1
that we have the requirements right. The USSR could
ease the shortfall in the near term by reducing the
quantity of grain used for food and industrial pur-
poses, saving perhaps up to 5 million tons of grain.
Livestock herds could also be cut, thereby increasing
meat supplies temporarily but reducing them over the
next year or two. Feed supplies could be stretched
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84S00558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558ROO0100140002-7
Figure 4
USSR: Grain Shipments and Turnaround Time,
July 81-August 82a
Average turnaround time in days
All Soviet ports)
Tons
Days
JulAugSepOctNovDecJanFeb MarAprMayJunJulAug 0.0
'Grain .hipmenl data lagged he 30 dais to Feller( ^verigc
Wiling limy', from supphing cuunlric,_
even more than at present by reducing feedstock
rations. Although this would save several million tons
of grain, it would also lower animal productivity by
making slaughter weights lighter and by reducing
milk yields.
Looking Ahead
Beyond the current marketing year, Soviet grain
imports will continue to be linked to the size of the
annual harvest. If there is a bumper harvest next fall,
imports could fall from the levels of the past few
years. If grain production does not pick up this year,
however, Moscow will face a difficult choice. Al-
though the USSR could reduce long-established goals
for meat production to avoid an increase in depend-
ence on foreign grain, a turndown in meat availability
could affect already low labor productivity. In any
case, on the assumption that world grain production
will continue to increase for at least the next year, we
expect Moscow to have no problems meeting the lion's
share of its future grain import needs from suppliers
other than the United States.
Long-term agreements with non-US suppliers already
assure the Soviets access to about 10 million tons of
grain annually. In addition to existing agreements
with Canada and Argentina, Moscow is exploring
possibilities with France and Australia that could
assure several million tons more. In these circum-
stances Soviet officials will be in a good position to
take a wait-and-see attitude toward making purchases
in the United States
Although it is too early to estimate MY 1984 output
in the countries that compete with the United States
in world grain markets Canada, Argentina, Austra-
lia, and the EC-some general observations can be
made. Using average output for these major US
export competitors for the most recent five years
during which production was greater than 200 million
tons -a method that dampens the effect of output
fluctuations due to weather and trade policy shifts-
these countries would typically have some 70 million
tons available for export. After providing for tradi-
tional non-Soviet markets, Moscow could expect to
obtain roughly 20 million tons before turning to the
United States or buying grain piecemeal from small
exporters. In fact, during the most recent two years,
Moscow obtained about 28 million tons from these
sources and could probably do as well in MY 1984
unless Canada or Argentina suffers severe setbacks.
25X1 I
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558ROO0100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Secret
Appendix A
Survey of Recent
Soviet Crop Estimates
Date of Estimate Million Tons
6 January 1983 187
4 January 1983 205+ A.I. Iyevlev, Deputy Minister of Agriculture, told an Embassy officer in Moscow that
(see comments) the 1982 harvest would be better than the 205-million-ton average during 1976-80.
December 1982 (see comments) In early December several East European political officers indicated to the US
Agricultural Counselor that the 1982 harvest would be 20-30 million tons better than
November 200+
(see comments)
19 N,nentber 180+
(see comments)
10 November 180
8 November 165
3 November 176
I November 185
October
19 October
19 October
19 October
USDA official estimate. --"
CIA.
from the audience with the caveat that perhaps no final figure would be given for 1981
to prevent "foreign blackmail."
B. N. Chubinindze, Chief of Fats and Oil, USSR Ministry of Food and Industry, and
V. Kuzmin, USSR State Planning Commission.
170 Tanjug, Yugoslav press agency: "According to unofficial Soviet sources this year's
harvest (from around 125 million hectares) will yield some 170 million tons of cereals."
8 October 170 USDA official estimate.
4 October 180-190 N. Patushkov, International Editor for Sel'skava zhr:n told the VS Agricultural
Counselor that his contacts in the Ministry of Agriculture gave him this information.
30 September 180 International Wheat Council.
30 September 167.6
24 September (see comments) V. Pershin, head of Eksportkhleb, told the US Agricultural Counselor that the CS esti-
mate of the Soviet grain crop (presumably USDA's 170 million tons) is "just a little too
low.
15 September 163.3
10 September (see comments) Agricultural reporter for Trud, Golyacv A. Aleksandrovich, told VS agricultural
attache that the 1981 crop was "about 160 million tons" and that this year's harvest
would be "a little better than last year's."
10 September (see comments) Soviet Embassy officer told US Embassy officer that he understood that the 1982 har-
vest "is a little bit better than in 1981."
25X1
25X1
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
I September 180
September 180
31 July 163.3
26 July 165
15 July 168.8
12 July 175
12 July 170
Early July 160
28 June 185
June 185
CIA.
USDA official estimate.
CIA.
USDA official estimate.
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Secret
Appendix B
Estimating Soviet
Livestock Feed Needs
Historical estimates of grain feed are based on Soviet
statistics on the quantity of total concentrates fed,
reported by calendar year. (Concentrates are feeds
high in nutritive value.) Estimates of nongrain concen-
trates fed milling byproducts, oilseed meals, and
alfalfa and grass meals-- must be deducted from total
concentrates to derive estimated grain fed in the
calendar year. The calendar year statistic, in turn, is
converted to crop year (July-June) using a convention-
al onethird fed in year of harvest, two-thirds fed in
the following year.
Our estimates of future use of grain for feed initially
assume that (a) planned targets for production of
livestock feed will be met and (b) the share of grain in
total livestock feed remains unchanged. In poor crop
years, estimates of grain required for feed decline as
goals for livestock products become unattainable. For
example, our latest estimate of grain required for
livestock feed in crop year 1982/83 dropped by 8
million tons (from 119 million tons net to I 1 1 million
tons) as monthly production data (for meat, milk, and
eggs on state and collective farms) ruled out earlier
projections of increased livestock product output in
1982 and first-half 1983.
Moreover, as the crop season progresses, information
on the availability of nongrain feedstuffs affects the
estimate of grain needed for livestock feed. This year,
an improved potato crop (estimated at 80-85 million
tons compared with 72 million tons in 1981) and
substantially larger supplies of harvested forage-
hay, haylage, straw, silage, and grass meal-will
permit relatively more substitution of nongrain feed
for grain in livestock rations. As of late October,
supplies of haylage and silage were at record levels.
Supplies of harvested forage crops and potatoes for
feed in terms of feed units (comparable nutritive basis)
this year are up substantially over last year. If the
quality of these feeds can be maintained -a difficult
task in the USSR where storage facilities are limited
and losses as high as 40 percent are cited in the
literature-the estimated need for grain for feed
could be reduced by 15-20 million tons compared with
1981/82.' In our calculation of grain utilization in
1982/83, we now estimate livestock feed requirements
at 94 million tons of grain, net of waste and losses.
This estimate takes into account the increased avail-
ability of forage crops and assumes livestock product
output at roughly last year's level.
Leadership choices regarding herd maintenance and
animal productivity add further uncertainty to our
estimates of grain required for feed. Our estimates
implicitly assume that current feeding levels will
continue. This may not be correct. Feed rations per
head peaked in 1977, dropped slightly in 1978 the
last good year of agricultural performance and have
continued to decline slowly since then.
A decision to maintain current livestock inventories
while reducing feed supplies further would reduce
total feed requirements by about 20 million tons and
grain requirements by as much as 7 million tons.
Although a cut in rations on this scale would sharply
reduce output, it would maintain herd numbers, a
high priority goal of the USSR since the forced
slaughter that occurred following the disastrous 1975
grain harvest.
' Recently, farms have been warned not to expect to cover feed
shortages from state supplies. This could force farms to handle
forage crops with more care in order to reduce losses as well as to
25XJ
25X1
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Table B-1
USSR: Feed Expenditures
Million tuffs
offeed units
Average
Average
1979/80
Estimated
Estimated
1966/67-
1976/77-
1980/81
1981/82
1975/76
1978/79
Total feed units
338.4
401.0
399.8
399.4
396.7
Concentrates
103.3
141.9
144.8
144.6
145.1
Grain
Gross
87.1
121.0
123.2
122.9
123.4
Net
70.2
97.6
106.7
101.6
110.6
Nongrain concentrates
16.2
20.9
21.6
21.7
21.7
Succulents
93.5
1 18.0
116.4
1 17.4
1 19.9
Of which:
Silage
38.0
47.7
48.1
48.0
48.1
Coarse feed
48.8
59.6
59.3
60.8
60.7
Of which:
Hay
36.3
33.7
35.5
36.1
40.7
Other h
92.8
81.5
79.3
76.6
71.0
11 The USSR measures grain production on a bunker-weight basis;
that is, straight from the combine before cleaning and drying. We
have established in earlier work that the discount varies around I I
percent of total output depending on size of crop and moisture at
time of harvest. For grain balance work, official statistics on grain
fed must be adjusted to be comparable with the standard weight
grain associated with other uses. To make the adjustment, we
assume that 80 percent of total waste and losses is included in the of-
ficial feed statistics. This share reflects in particular the higher-than-
average storage losses associated with grain used for feed and was
found to yield reasonable net feed and implied stock change series. It
was also found to give results that are consistent with derived
average feed unit values for grain fed on a standard weight basis.
The average feed unit value of grain fed in the USSR varies from
0.98 to 1.0 according to Soviet feed specialists, or is about equal to
the nutritive value of oats, the Soviet standard feed unit.
I Largely pasture but also includes feedstuffs such as milk, skim
milk, meat, bone meal, and other feeds of animal origin that are
excluded by Soviet definition from concentrates.
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Secret
Appendix C
Soviet Logistic Constraints
Merchant Ship Availability
The USSR will have little difficulty lining up all the
foreign-flag grain carriers it needs during the grain
marketing year ending in June 1983, and it will be
able to do so at rock-bottom rates. Record numbers of
dry bulk carriers are laid up for lack of business, and
charter rates are weaker than at any time in the last
four years. Surplus ship capacity is mounting because
of heavy deliveries of new ships ordered before the
present slump in shipments of key bulk cargoes such
as coal and ore. With more excess tonnage overhang-
ing the market, charter rates probably will drop even
further. The USSR is currently chartering bulk carri-
ers in the size range it most frequently uses for grain
(25,000 to 35,000 DWT) at rates averaging no more
than $3,500 per day-less than half the rate it was
paying for such ships in the second half of 1981.
Offloading Equipment Capacity
Our preliminary assessment of all the grain offloading
equipment available and apparently operational in the
18 major Soviet grain ports indicates that the total
rated capacity of the equipment probably exceeds 58
million tons per year. This estimate is based on
conservative efficiency assumptions of 16-hour work-
days and 240-day workyears, even though older open-
hopper equipment is being steadily replaced with
higher capacity covered units having all-weather ca-
pability. Moreover, the estimate does not take into
account the ability of the many small inland water-
way ports to absorb grain delivered by small, shallow-
draft vessels after transshipment from big ships in
West European ports-a practice that allowed the
Soviets to bring in at least a million tons of grain last
year beyond that handled by the major ports.
Although measures are being taken to alleviate the
situation, Soviet port authorities currently lack suffi-
cient covered storage facilities for grain and are
unwilling to store it in the open. With little buffer
storage, the unloading of a grain ship usually has to
stop when the supply of empty railcars runs short. In
such circumstances, spot shortages of railcars can
constrain both the ports' capacity to offload grain and
the movement of grain inland from the ports.
Rail Availability
The availability of appropriate types of railroad cars
for grain movement out of seaports fluctuates season-
ally. The demand for cars often exceeds supply,
especially during those months when railroad cars
suitable for moving imported grain are also required
in large numbers for competing transportation activi-
ties-usually mid-June through November. These pe-
riodic shortages reflect both the limited inventory of
cars and inadequacies in the maintenance and man-
agement of the car park. Barring disruptions stem-
ming from extreme weather conditions, railcar avail-
ability is unlikely to curb the flow of grain through
Soviet seaports until some time in June 1983.
Estimate of Current Grain Offloading Capacity
Taking into account the past investment in grain
handling facilities and the recent patterns of shipping
activity, we conclude that the rated discharge capaci-
ty of USSR grain port equipment significantly ex-
ceeds the Soviet's ability to move the grain inland,
which we have estimated to be 45 to 50 million tons
per year.
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
 Secret Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7
Secret
Sanitized Copy Approved for Release 2011/01/07: CIA-RDP84SO0558R000100140002-7