Ukraine: USDA's Ukrainian barley output estimates cause doubts

The US Department of Agriculture's (USDA) first estimates for Ukrainian barley production in the new 2023-24 marketing season surprised market participants, as they are based on much higher harvested areas than those currently suggested by this year's spring barley planting progress and forecast by local analysts, Argus Media reported on May 23.

Ukraine's barley production is projected to reach 5.9 mln tonnes in the 2023-24 marketing season (July-June), down from 6.18 mln a year ago, according to the latest USDA World Agriculture Supply and Demand (Wasde) report published earlier this month. The output forecast is based on the average yield of about 3.28 t/hectares (ha), down slightly from 3.34 ha/t a year ago, and harvested area of about 1.8 mln ha, marginally below last year's USDA forecast of 1.85 mln ha.

USDA's projections differ sharply from its Foreign Agricultural Service (FAS) estimates, which were published in early April. USDA's attache in Kyiv projected Ukraine's barley production in 2023-24 at 4.3 mln t, 1.6 mln t below the first official USDA forecast and compared with 6.2 mln t in 2022-23. The projected average yield stood at about 3.26 t/ha, slightly below the USDA estimate, but harvested areas were forecast to fall to 1.32mn ha, including about 600,000 ha of winter barley acreages and 732,000 ha of those of spring barley.

Meanwhile, the Ukrainian agriculture ministry preliminary forecasts for the country's 2023-24 barley production were somewhere in the middle, at 4.8 mln t — down from 5.6 mln t in 2022-23 — based on 536,000 ha of winter barley areas and projected 1.04 mln ha of spring barley acreages, with the average yield forecast at about 3.2 t/ha.

That said, the latest ministry data on spring crop planting progress showed that only about 760,000 ha were sowed with spring barley on 18 May, with the planting delayed significantly by rainy weather in April. The planting campaign for spring barley is almost finished in most regions, with only about a 20,000ha week-on-week increase registered in the two weeks to 18 May.

This means that Ukraine's 2023-24 total barley acreages are unlikely to significantly surpass 1.3 mln ha, which is almost in line with USDA FAS' estimate.

Ukraine's local analysts and market participants, interviewed by Argus, tend to find USDA FAS' estimates for Ukrainian 2023-24 barley production more credible compared with the official USDA figures.

Ukraine's association of agricultural producers Ukrainian Agribusiness Club (UCAB) projects Ukraine's barley output in the new season at 4.2 mln t, with total harvested acreages at 1.4 mln ha and the average yield at about 3 t/ha. "We made our forecast at the end of March, and we do not plan to change it, at least in terms of harvested areas, before harvest is finished," the UCAB's leading grains and oilseeds analyst Svitlana Litvin told Argus.

"Ukraine's barley harvested acreages are unlikely to be much higher than 1.3 mln ha next season. Meanwhile, production forecast could be revised up later from the current 4.4 mln t to about 4.7 mln t based on higher yields, if we see favourable weather with ample rains in May-early June," an analyst at an international grains and oilseeds trading firm told Argus.

Meanwhile, Argus' agricultural analytics arm Agritel anticipates Ukraine's barley production in the new season at about 4.2 mln t, with the projected figure based on the projected harvested areas at about 1.3 mln ha and the average yield of 3.16 t/ha. The production forecast can also be increased later, based on higher yields provided there is favourable weather in the upcoming weeks, Agritel said.

Different production forecasts for Ukraine's 2023-24 barley have also resulted in different export forecasts in the new season. With very close estimates from USDA FAS and the official USDA for the country's domestic consumption in 2023-24 — at 3.26 mln t and 3.6 mln, respectively, — exports are projected at 1.1 mln t and 2.3 mln t, respectively. These compare with the previous season's estimates of 2.7 mln t and 2.4 mln t, respectively.

Agritel currently forecasts Ukraine's barley exports next season at 1 mln t, with domestic consumption at 3 mln t. This means if the average yield does not increase sharply amid favourable weather, Ukraine will continue to lose its share in the global barley market. The country exported only 2.5 mln t of barley in June 2022-April 2023, down from 5.7 mln t in 2021-22 and 4.2 mln t in 2020-21.

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