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Former USSR: U.S. Expects More Farm Exports To FSU, East Europe

Washington, 18 December 1996 (RFE/RL) - The U.S. Agriculture Department has raised its estimate of how much food and farm output America expects to sell to the nations of the former Soviet Union in the current financial year to $1.9 billion, with most of it -- $1.5 billion worth -- expected to be sold to Russia.

The department, in its quarterly review of export forecasts and food production around the world, says the U.S. exports in the 1997 fiscal year which began October 1st will be up 15 percent from what was sold to the ex-USSR countries in the 1996 fiscal year.

The U.S. says meat is now the major food product Russia and the other CIS countries buy and "will continue to dominate U.S. exports" to the region for the foreseeable future. It says the main reason is the "continued contraction" of the livestock sector which is suffering reduced inventories mostly due to the very high cost of feed and other required inputs.

U.S. farm exports to the nations of Central and Eastern Europe are also expected to rise slightly in the 1997 financial year, totaling about $408 million, with animal products and grains accounting for the increase.

The Agriculture Department says grain exports to the region are expected to increase because of poor 1996-1997 grain crops and purchases of U.S. poultry meat are expected to increase because of the higher local cost of maintaining livestock. Poland remains America's largest customer for farm goods, but U.S. exports to the region have never recovered to the levels of the 1980s.

However, says the report, the nations of the region are now buying a broader array of products, including such things as popcorn, processed grain products and nuts.

In its review of production outlook, the U.S. experts say that unusually mild weather since early November favored winter grains throughout the former Soviet Union, and allowed Russia and Ukraine to complete more late-harvest activities. However, it also caused many crops to enter dormancy four to five weeks later than usual. The combination of mild weather and a lack of snow cover has left crops "highly vulnerable to potential winterkill," says the department.

The U.S. says it expects wheat production in the ex-USSR nations to total around 64 million tons in the coming year, an improvement over the 1995-1996 years, but still below earlier forecasts.

Oilseed production among these countries is estimated at eight million tons, down from earlier estimates because dry conditions have reduced yields of Russian sunflowerseed. The U.S. says cottonseed output in Turkmenistan and Uzbekistan is also expected to be down.

A U.S. agricultural attach�'s report on the harvest in Ukraine was not very positive, concluding that "about the only encouraging news for the Ukrainian agriculture sector is that winter-crop sowing for 1997-1998 was completed without notable problems and conditions were favorable for crop germination and establishment."

The report says Ukraine's crop production for 1996-1997 "fell substantially below last year's levels for nearly all major commodities."

The report says the assessment is based on the travels of U.S. experts to farming areas in Ukraine, as well as meetings with Republic level officials, crop forecasters and independent agricultural observers.

"While weather is chiefly to blame for the poor harvest results, the inadequate application of fertilizers and plant-protection agents continues to take its toll on grain and oilseed yields," said the report.

Grain production in Ukraine is estimated at around 24.5 million tons, down 7.4 million tons from last year. It says wheat output is estimated at 14.5 million tons, down 1.8 million tons from last year "despite a 14 percent increase in harvest areas."

In other crops, output is also well short of 1995 levels, says the U.S. report. Sunflowerseed production is estimated to drop 30 percent to two million tons while corn production is estimated at 1.5 million tons compared to 3.4 million tons last year.

Weather caused most of the problems, the U.S. analysts say, but a significant factor continues to be the lack of fertilizer and other chemicals. "The situation does not stem from an actual shortage of products," says the report, noting that 70 percent of the nitrogen fertilizer produced in Ukraine is exported.

Rather, it says, fertilizers and plant-production chemicals "remain prohibitively expensive for cash-strapped farms." The positive side of that, it says, is that many farms are now increasing their use of organic fertilizers, adjusting crop rotations and applying mineral fertilizers with "great efficiency." Still, it says insect pests continue to have a "considerable negative impact" on the quality of grain.