USSR: PROSPECTS FOR GRAIN AND OTHER MAJOR CROPS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86T00608R000500160006-5
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 15
• Document Creation Date: December 9, 2016
• Document Release Date: August 2, 2000
• Sequence Number: 6
• Publication Date: September 4, 1975
• Content Type: REPORT

`/ I ? ` ~',~ R ? V I B 7 /~ ~ Oq~pved For Release 200
914: P QOBO 160006-5
USSR: Prospxects; f'o.r.:: Arai
~Other~ ~M,ajor
N
C/N1=Dt. ~ ~, of,
ER J B 75-C
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No Foreign Dlssem
USSR: Prospects for Grain and Other Major Crops
Confidential
ER IB 75.6
4 September 1975
Copy N2 112
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NATIONAL SECURITY INFORMATION
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Classified by 015319
Exempt from General Declasslflcation Schedule
of E.O. 11652, exemption cotegoryr
?511(1), (2), and (3)
Automatically eclassifled oni
date impossible to determine
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USSR: PROSPECTS FOR GRAIN AND OTHER MAJOR CROPS
1. We currently put the Soviet grain crop at 170 million metric tons, up
slightly from our previous estimate of 165 million tons. The Soviets had planned
for a grain crop of 215 million tons.
2. The revised production estimates for the most part reflect. the receipt
of new information and the reevaluation of other data -rather than improved
conditions. Even this late in the crop year, however, the estimate remains more
uncertain than usual because of record-breaking poor weather conditions and nearly
total silence about crop conditions by the Soviet media.
3. While improved weather since late July arrived too late to hell) the 1975
Soviet grain crop except for corn, it was in time to brighten prospects for other
important crops such as sugar beets, sunflower seeds, and potatoes.
Production of potatoes should be about 10% greater than last year's poor
harvest of 81 million tons;
? The sugar beet crop will be above the 1974 level of 76 mibion tons
but will likely be 8 to 10 million tons shy of the 94 million ton goal;
and
? Output of sunflower seeds will drop 12% below last year's level to about
6 million tons.
4. Since mid-July the USSR has contracted for 15.3 million tons of Western
grain for delivery by September 1976, including 9.8 million tons from US grain
companies. Confirmation of rumored purchases would boost the total to more than
16-1/2 million tons.
5. Trade prospects for other crops are less clear. Rumors of a 350,000 ton
purchase of sugar from the Philippines have not been substantiated, although it 25X1A9a
Note: This publication was prepared by the Office of Economic Research. It
incorporates materia'c and analysis suppked by the Environment Analysis Staff of
the Office of Geographic and Cartographic Research. Comments and queries
regarding this publication are welcomed and may be directed to
of the Office of Economic Research, Code 143, Extension 5107.
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is likely that the Soviets bought at least 11,111, of that quantity. Moscow is reportedly
negotiating for an additional 300,000 tons from India. Although not needed to
fill domestic vegetable oil requirements, the USSR may decide to import soybeans
to stretch feed supplies.
6. Improved weather in late i'u!v and most of August in much of the USSR's
cropland did not brighten the outlook for 1975 grain production but bettered
conditions for other crops. This publication updates our previous estimate of Soviet
crop production using weather data through 24 August and collate-,al
information - including reports from the US Department of Agriculture's winter
and spring wheat tea; s that vi^,itud the USSR in June and .July - and discusses
Soviet activity in international com.!uodity markets.
Crop Status
7. Our end-of-August estimate of the Soviet grain crop is 170 million tons,
up slightly from the previous forecast of 1 65 million tons (see Table I). This is
approximately 25 million tons less than last year's crop and only 2 million tons
higher than the 1972 harvest that sparked Moscow's last round of massive grain
purchases.
8. Most of this year's shortfall is in fccdgrain output (barley, corn, and
oats) - expected to be about 19 million tons less than last year's crop and close
to the 1972 level. Production of wheat - the most important foodgrain - is
estimated at 79 million tons, only 5 million tons below the 1974 crop because
of this year's excellent winter wheat harvest.
9. This year the area sown to grain is 1.3 million hectares greater than
in 1974 (sec Table 2). Wheat and barley sowings are up 4% and 5%, respectively,
while the corn area is down almost 20% from I974's unusually high level. Each
year a portion of the sown area is abandoned or cut for fodder. In 1974 the
harvested area was 127.2 million hectares, 2-1/2 million hectares less than the area
sown. There is evidence that a part of this year's drought area has been abandoned
and that the harvested area will approximate last year's total.
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USSR: Production of Grains
Million Metric Tons
Annual
Average
Esti-
mated
1966.70
1971
1972
1973
1974
19^5
Total
167.6
181.2
168.2
222.5
195.6
170
Winter grains2
50.8
63.0
40.6
63.5
62.5
61.5
Of which:
Wheat
35.9
47.8
29.4
49.4
44.7
46.5
Spring grains
116.7
118.2
127.6
159.0
133.1
108.5
Wheat
54.3
51.1
56.6
60.5
39.2
32.5
Barley
28.3
32.3
35.1
51.7
51.6
37
Other3
34.1
34.8
35.9
46.8
42.3
39
1. Because of rounding, components may not add to the totals shown.
2. In addition to winter wheat, winter grains include rye and winter barley.
3. Including corn, oats, miscellaneous grains, and pulses.
10. The revised production
estimates for the most part reflect the
receipt of new information and the
reevaluation of other data rather than
an improvement in Soviet grain crop
conditions. In much of the USSR's
spring grain area and in the southern
Ukraine and northeastern Caucasus -
important winter grain, corn, and
sunflower producing areas - drought
continued throughout most of July
(see the map). Rain in late July and
early August shrank the western
boundary of the drought area but
came too late to improve grain
prospects.
11. Even this late in the crop
year the estimates remain more
uncertain than usual. Last winter's
excellent conditions were followed by
Table 2
USSR: Sown Area, by Typt of Grain'
Million Hectares
Total
Winter grains
Of which:
Wheat
Spring grains
Wheat
Barley
Corn
Other'
Pre-
lim-
inary
1974
1975
129.7
131.0
29.8
29.2
18.7
19.6
99.7
101.6
41.2
42.6
30.0
31.4
5.2
4.2
23.3
23.4
1. Because of rounding, components may
not add to the totals shown. Each year a
portion of the sown area is abandoned or
cut for fodder. For example, in 1974 the
harvested area was 127.2 million hectares,
2-1/2 million hectares less than the area
sown.
2. Including oats, miscellaneous grains,
and pulses.
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USSR: Soil Moisture Conditions in the Major Grain Growing Area
o aoo
MILES
Econornic region boundiiry"
Area below 50 percent of normal soil moisture
= 20 July
[I 20 August
11 West Siberia
Nmihwesl l1
Travis- 7
Caucasus
4
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the worst drought recorded in our 15-year data base, making statistical estimation
unusually difficult. In addition, most of the area that remains to be harvested
is cast of the Urals where early frosts or poor weather could lead to above-normal
harvest losses. Moreover, collateral information from Soviet newspapers has not
been helpful in quantifying the size of the harvest. Normally, grain yields for farms
and administrative areas (crayons and oblasts) are cited in the local press. The press
has published little about local conditions and virtually nothing about the drought
area,' although almost two-thirds of the grain area is now harvested.
Forage Crops
12. Hay and other forage crops, which normally supply about two-thirds of
the USSR's livestock feed, have also been hurt by the dryness.' Roughly half of
the area under forage crops has been affected by the drought, dropping output
by up to 50 million tons - roughly one-fourth of normal production - and possibly
adding 11 to 15 million tons of grain to requirements for livestock feed.' Reduced
expectations for corn ensilage accounts for most of the loss in forage crops" ; the
remainder is hay.
13. Forage crops in the areas not affected by the drought are average or
better, with harvesting progressing ahead of schedule. On balance, however, the
fodder situation remains serious. Hay procurements by the state have slowed
markedly, with only about 60% of the plan filled. Moreover, campaigns to increase
feed supplies - for example, sending office workers and school children in southern
Kazakhstan to gather "twigs and reeds to be used as fodder" and moving livestock
to nondrought areas to graze - illustrate the severity of the problem.
14. The impact of the reduced harvest of forage crops on the livestock sector
is not yet known. Conservation measures will certainly bolster feed supplies, but
at best there will be a temporary slowdown in Brezhnev's ambitious livestock
program. Prior to this crop year the livestock program was in good shape, thanks
largely to back-to-back bumper harvests in 1973 and 1974. During thip period the
amount of grain fed to livestock increased sharply; generally, herds entered the
drought period in top condition.
1. A Leningrad lecturer recently stated that the grain harvest would probably be around 190 million tons,
down from early June prospects for 210 to 215 million tons as a result of drought conditions in principal
growing areas. This estimate seems substantially above expectations and probably reflects efforts to stave
off food hoarding and price increases in the free markets. The lecturer did not mention Soviet grain purchases.
2. Important forage crops include ensilage (9% of total feed units in 1970, the year of most recent data),
green chop (9%), potatoes (3%), hay (1%), straw (6%), and pasture (23%).
3. The conversion from forage into grain equivalent depends on the type of grain available for feeding.
A unit of corn, for example, supplies roughly one-third more feed value - by Soviet calculations - than
a unit of oats.
4. Areas affected by he drought normally produce half of the USSR's corn ensilage.
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15. Nevertheless, the leadership faces a serious challenge in the drought areas,
where about one-third of all livestock are raised, and it is now taking steps to
protect herds. Feed supplies are being shipped into the drought areas, and livestock
is being moved to better pastures in an effort to avoid mass slaughtering of herds.
Such slaughtering would temporarily increase the amount of meat available to
consumers but would slow future growth in meat supplies. For example, after forced
slaughtering following the 1963 crop failure, it took several years for swine herds
to regain the pre-slaughter levels.
16. The downturn in production of forage
crops will increase the need for grain. More than
half of the USSR's grain crop is used to feed
livestock, as shown in the accompanying
tabulation. In contrast, only about one-third of
the grain crop was used to feed animals a decade
ago. Other grain uses - food, seed, industrial use,
and export - have changed little and have shrunk
as a share of total grain requirements. These are
normal grain needs; unusual losses of forage
crops - such as those experienced this year - or
potatoes - an important feed crop - necessitate
the substitution of grain in livestock rations,
adding to grain requirements. This year, for
example, forage losses will boost total
requirements to more than 210 million tons.
Other Major Crops
Million Tons
FY
1975
FY
1976
Grain required for:
Seed
27
27
Food
60
60
Industry
3
3
Export
7
3
Livestock feed'
101
104
Total grain demand
198
197
1. Estimated requirements for live-
stock feed are arbitrarily reduced by
10% to exclude the excess moisture and
extraneous matter included in bunker
weight measurement of grain used by the
soviets.
17. Prospects for other major nongrain crops - sugarbeets, potatoes, and
sunflower seeds - are much better than for the grain crop. These crops are largely
grown outside the drought area and in any case are generally far more drought
resistant than grain. Moreover, because these crops mature later than grain, the
rains during the past few weeks have improved prospects in areas that were suffering
moisture deficiencies.
18. Sugar beet production will be up from a disappointing 76.4 million tons
in 1974 but will likely be 8 to 10 million tons shy of this year's goal of 94 million
tons (see Tables 3 and 4). An early spring promoted the '.wing of sugar beets,
but thinning work, critical to good beet growth, was not completed as scheduled.
So far, growing conditions in the sugar beet area have been mixed. In the western
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USSR: Production of Major Nongrain Crops
Annual
Averaf :
Esti-
mated
1966-,0
1971
1972
1973
1974
1975
Potatoes
94.8
92.7
78.3
108.2
80.7
89
Sugar beets
81.1
72.2
76.4
37.0
76.4
85
Sunflower seeds'
6.4
5.7
5.0
7.4
6.8
6
Vegetables
19.5
20.8
19.9
25.9
23.1
21
Cotton
6.1
7.1
7.3
7.7
8.4
8.4
1. Data given. arc official Soviet statistics and should be discounted by 89' to derive estimated usable
production.
USSR: Area of Major Nongrain Crops
Anneal
Esti-
Average
mated
1966-70
1971
1972
1973
1974
1975
Potaioes,
8.2
7.9
8.0
8.0
8.0
7.9
Sugar beets
3.6
3.3
3.5
3.6
3.6
3.7
Sunflower seeds
4.8
4.5
4.4
4.8
4.7
4.8
Vegetables
1.4
1.5
1.6
1.6
1.7
1.7
Cotton
2.5
2.8
2.7
2.7
2.9
2.9
and northern Ukraine, which normally produces about two-thirds of the crop,
conditions have been very good. In the southern Ukraine and eastern black soil
area, where about one-fourth of the crop is located, the prolonged dryness cut
production prospects. The late July rains were in time to partly resuscitate the
crop, however. Weather until harvest time in September will continue to affect
production. Warm, sunny days are needed for maximum sugar accumulation. For
example, last year, late planting, a cool summer, and a rainy fall delayed the harvest,
reduced beet yields by 15%, and lowered sugar content of the beets by 5%.
19. Production of sunflower seeds, the source of roughly 70% of domestically
consumed vegetable oil and also, of high-protein meal for supplementing livestock
feed, probably will drop below last year's level. Much of the major sunflower
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growing area - especially the southern Ukraine and northeastern Caucasus - was
severely affected by the drought. Although sunflowers are generally hardy,
drought-resistant plants, this year's unusually severe conditions have reduced yields
substantially. Here, too, rains during the past month have mitigated the drought's
effect. We estimate that about 6 million tons of sunflower seeds will be harvested
from the 4.8 million hectares planted this spring. The crop is down from last year's
6.8 million tons and the record 7.4 million tons harvested in 1973. Nevertheless,
a vegetable oil shortage is not expected. The record 1973 sunflower crop promoted
stock accumulation, and the outlook for the current cotton crop, the other major
source of vegetable oil, is good.
20. Output of potatoes, an important starchy staple, also has been diminished
by below-normal soil moisture and partly revived by the better weather in late
July. The harvest should be at least 10% greater than the poor 1974 crop of about
81 million tons but will be roughly 20 million tons short of the 1973 record.
Approxima1::ly 60% of the potatoes are grown on private plots and were
undoubtedly more closely tended during this summer's hot spells than those grown
in the socialized sector of the economy. Reports that new potatoes, which are
just now appearing in Moscow markets, are being sold at normal prices support
our assessment.
21. The picture for other crops is mixed. Cotton production will exceed the
1975 plan and possibly reach last year's record 8.4 million tons. Vegetable output
should be slightly below 12,zt year's 23 million tons, and fruit production, hurt
more severely by the drought, will be down.
22. Moscow cannot entirely fill the large gap between 1975 grain output
and requirements with imports. Since mid-July the USSR has purchased 15.3 million
tons of grain for delivery by September 1976, of which 9.8 million tons were
bought from US grain companies (see Table 5). Confirmation of rumored purchases
would boost the total to more than 16-1/2 million tons, worth about $2-1/2 billion.
23. The USSR continues to search for grain, having commissioned one
UJS-based grain company to buy any non-US origin wheat, corn, and barley. The
USSR's relatively strong financial position will allow it to compete actively for
available world grain. However, both the United States and Canada have temporarily
halted sales to the Soviets until ciresh assessments of their own crops are made
in early September. Potential Soviet purchases from sources other than the United
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USSR: Grain Purchases, Confirmed and Unconfirmed,
as of 27 August 1975
Quantity
(Thousand
Metric Tons)
Estimated
Value'
(Million US $)
Delivery Period
Total grain
16,619
2,432
Wheat
10,255
1,680
Corn
4,603
553
Barley
1,600
179
Oats
101
12
Rye
60
8
Supplier
United States2
9,800
1,317
Wheat
4,200
651
Aug 75 - Aug 76
Corn
4,500
540
Oct 75 - Aug 76
Barley3
1,100
126
Oct 75 - Aug 76
Canada
4,121
680
Wheat
3,810
645
Aug 75 - Aug 76
Oats
51
6
Aug '75 -Oct 75
Barley
200
21
N.A.
Rye (unconfirmed)
60
8
N.A.
Australia
1,100
186
Wheat
1,100
186
Sep 75 - May 76
Argentina
200
36
Wheat
200
36
N.A.
Brazil
50
6
Corn
50
6
N.A.
France (unconfirmed)
700
100
Wheat
400
68
N.A.
Barley
300
32
N.A.
West Germany (unconfirmed)
500
85
Wheat
500
85
Italy (unconfirmed)
98
16
Wheat
45
9
N.A.
Corn
53
7
N.A.
Optional origin
50
6
Oats
50
6
1. All values are assumed to be f.o.b.
2. Country of origin at seller's option.
3. Probably will be switched to equal amount of corn at seller's option.
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States and Canada now appear limited to about 4 million tons this year. This
year's large grain imports, coupled with rising demand and uncertainty about its
ability to consistently meet future requirements from production, increases the
likelihood that Moscow will be willing to participate with Western suppliers in
a long-term purchase agreement.
24. The total amount of Soviet grain imports is not constrained by port
capacity. In 1973, grain deliveries reached 24 million tons, with no major delays
reported. With reasonable scheduling, ports in the USSR can handle up to
36 million tons of grain imports a year. The domestic transport system also can
manage grain shipments of this magnitude by diverting freight cars from other
uses.
25. The Soviets have also shown an interest in importing sugar this year.
After last year's disappointing sugar beet harvest the USSR spent $250 to $300
million to purchase an estimated 300,000 to 350,000 tons of sugar - primarily
from Australia, Brazil, and Peru - in addition to 2.4 million tons imported from
Cuba. The failure of this year's crop to meet piaLned le-.--Is apparently prompted
the USSR to reenter the market. Rumors of a 350,000 ton pur',h we f-um th:
Philippines have not been confirmed, but the USSR probably bought at leas hl::tl
of that quantity, worth roughly $85 million. Soviet ships have been seen ioading
sugar at one Philippine terminal. Moreover, : ie USSR is reported to be currently
negotiating with India for 300,000 tons, valued at approx;mately $140 million,
to be delivered during the next six months.
26. There is no evidence that other commodities such as soybeans will be
purchased.5 Despite the downturn in sunflower seed production there will be
enough sunflower seed and cotton seed oil to fill domestic vegetable oil
requirements and probably allow some exports. Soybean purchases could be used,
however, as a means of stretching this year's feed supplies. Moscow has made only
one major purchase of soybeans before - i million tons from the United States
in 1972.
Domestic Options
27. Since grain imports will not meet this year's requirements, the Soviets
will have to use stocks, estimated to be up to 15 million tons, and take steps
to reduce the demand for grain.
5. Recent rumors that Brazil has sold a large quantity (if soybeans to the Soviet Union have not been
confirmed.
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28. As usual in a poor crop year, the USSR is reducing export commitments.
The Soviets have reportedly asked East European customers to look to the West
for FY 1976 import needs, estimated at 9 million tons. I-Iplf of this amount would
normally be supplied by the Soviets, and Moscow reportedly has agreed to help
defray the cost of the added Western imports. The Soviets probably will turn a
deaf car to requests for grain from non-Communist countries. In recent years the
Soviets have exported grain to India, Bangladesh, and the drought-stricken African
states.
29. Importing meat also could help lower grain needs. If the Soviets increase
meat imports to 1 million tons - equal to about 7% of domestic meat supplies
and double their 1974 imports - they could reduce grain demand by about 4
to 5 million tons.
30. In addition, Moscow will have to make adjustrner,ts at home to further
curb demand for grain through some combination of the following steps:
? lower the quality of bread, as Khrushchev did following the poor 1963
harvest, saving about 4 million tons of grain;
? reduce livestock inventories by about 5% -- to the 1972 level - saving
roughly 6 million tons; and
? cut feedgrain rations per head of livestock to the 1972 level, while
maintaining the current livestock inventory, saving approximately
13 million tons.
Given the regime's commitment to raising living standards, none of these steps
is attractive.
31. Agriculture's misfortune will be felt throughout the economy. The
agricultural sector contributes almost one-fourth of GNP. The expected downturn
in crop production and the likely ef' . ct on the livestock sector should markedly
dampen economic growth prospects for 1975. In 1974, for example, the economy
grew at 3.8%, half the rate posted a year earlier, primarily because of a 4.4%
drop in agricultural output.
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32. Moreover, Soviet grain purchases, currently valued at roughly $2.25
billion, will exacerbate balance of trade deficits with hard currency countries. Since
late last year, Soviet exports have been hurt by the recession in the West while
Soviet imports from those countries have remained high. The resulting deficit in
hard currency trade will exceed $2 billion in 1975. The outlook for 1976 is
uncertain; Western credits and Soviet gold sales will cover the 1975 deficit and
very likely any deficit which may be incurred in 1976.
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