World Grain - August 2018 - 30

FEATURE: CLIMATE CHANGE IMPACT DISCUSSED AT IGC

Robert Johansson,
chief economist,
U.S. Department
of Agriculture, said
there will be more
soybean acres
planted than corn
in the United States
this year.

knows that China is the largest producer of grain and also the largest consuming country, especially
soybeans."
Income has risen and the structure
of the population has changed.
"People living in urban conditions
has reached around 51%," he said.
"More and more people are going
into the city from the countryside.
Their income has increased. Their
consumption has increased. The uptake of commodities into China has
also increased."
In 2018, the Chinese government is
targeting a growth rate of 6.8% with
urban unemployment under 5.5%.
"Production of food has been
maintained at a very high level," he
said, but noted there is an oversupply of rice and maize. "China has
adjusted production structure ... to
reduce the oversupply situation and
raise the quality of food production.
The acreage adjustment is to try and
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demand situation."
YIELDS LOW IN AUSTRALIA
Peter Gooday, chief commodity analyst at the Australian
Bureau of Agricultural and
Resource Economics and Sciences

(ABARES), outlined that country's
grain industry.
"Australian grain production is
dominated by cereals, mainly wheat
and barley," he said. "Yields are low,
averaging 1.9 tonnes a hectare for
wheat. Over 70% of our grain production is exported. Continued productivity growth is essential."
The most important factor in
achieving that productivity growth is
long-term investment in innovation.
"Large farms have increased their
share of production dramatically,"
he said. "Something like half the increase in productivity since the 1970s
has been because of this reallocation
of resources to large farms."
Climate change is likely to be a
substantial challenge for Australia.
He explained that in the 1990s
Australian agriculture had become
more intensive, creating higher
production in good years but an increased sensitivity to climate shocks.
Now improvements are being targeted toward getting better results in
dry years.
"It's important the government
and others don't impede the kind of
adjustments and investments in technology that are necessary to respond
to climate change," he said.

MORE RUSSIAN WINTER WHEAT
Andrey Sizov, managing director of
SovEcon in Russia, told the conference that Russia had had a bumper
crop in 2017-18, producing 135 million tonnes of grain, a new record,
mainly because of increased wheat
production.
"Yields are growing relatively
slowly but they are growing," he
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average wheat yield in Russia had
been three tonnes per hectare.
There had been some expansion in
area over recent years.
"It's not exploding," he said.
In many cases it does not make
economic sense to bring land back
into production. Milder winters because of climate change means that
more winter wheat is being produced while the spring wheat area is
declining.
"Obviously winter wheat yields
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wheat," he said. "Climate change
allows us to plant more winter
wheat."
Russian production also has
been encouraged by the devaluation of the ruble and a period of
relatively high commodity prices. The wheat export growth is a
straight line going "up and up and
up." The possible limit is a lack
of terminal capacity. He put current capacity at around 55 million
tonnes a year.
"We had a very mild winter and
moisture reserves are okay," he said.
There are "no big problems with the
so-called Russian drought."
Siberia had a cold winter with
snow lasting to the end of May.
"Planting lagged badly," he said. "I
think at the end of the day it will arrive. The yields are likely to be lower
because of very late planting."
Also, for this year's wheat crop
he noticed that crops in the south are
close to average.
"The center looks better than av-

August 2018 / World Grain / www.World-Grain.com

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World Grain - August 2018

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