MONTHLY ISSUE ABOUT AGRO MARKET 2011 April No 4 (11)
AGROMEDIA
This issue Grain and rapes market Milk economy market Fertilizers market Agro technique market Agricultural land market
FAO calls for investment in agriculture Food and Agriculture Organization of the United Nations (FAO), reacting to global increases in food prices, together with partners in Africa, Asia, countries of the Pacific Region, Europe, Latin America and Near East starts a series of seminars to help state governments to make appropriate decisions on reacting to the increasing prices. FAO reports that global product prices with the exception of sugar, has been increasing for eight months in a row. The aim of the coming seminars is to exchange the experience on how to act in similar situations, beginning with the past crisis in 2007-2008, and on how to weigh all pros and cons of political means. ”FAO believes it to be necessary for the countries to review all political possibilities and try to avoid the decisions which could aggravate the situation,” Deputy Director-General Changchui He said. “The situation got worse during the last food crisis, when some countries introduced export limitations or engaged in panic buying.” Officers from 20 countries responsible for agriculture, trade and finance, representatives of agriculturalist organizations and others will take part in the seminars which started in Bangkok (Thailand) in the beginning of March and will last till the end of June. FAO informs that among representatives of the highest rank, there will also be delegates from the US Government and the European Union, as well as from the Association of Southeast Asian Nations (ASEAN). Seminars are organised seeking to get to know more about various strategic possibilities of reacting to rising prices and to prepare specific measures for each country that could help to avoid severe consequences. Another aim of the seminars is to advise on how countries could observe and exchange information about price changes, strategic actions and results. FAO expects it could help to adapt and prepare more effective strategies seeking to reduce influence of rising food prices.
Food products and energy will incite inflation in Eastern Europe In their forecast for Eastern Europe SEB bank analysts announce that rising prices of food products and energy resources will provoke inflation in the whole region whereas in Estonia prices of these products will rise next year as well. Prices of energy and food product resources have been growing promptly from the middle of the last year thus resulting in the increase of the consumer price index in the whole world. However, SEB bank analysts state in their forecast for Eastern Europe that, comparing to the United States and Western Europe, the growth of product prices is stronger in Eastern Europe, because food products and energy make the largest part of consumer basket in this region.
GRAIN AND RAPES MARKET Procurement prices of wheat and rye decreased in Lithuania In the middle of March, 2011, (11th week (14-20 03)) Lithuanian grain procurement companies bought wheat at 839.1 LTL/t on average – at 1.1 per cent lower price than a month ago (7th week (14-20 02)). Average procurement price of rye decreased by 8.6 per cent during the mentioned period (up to 752.8 LTL/t). However, average procurement price of feeding barley (II class) comparing to the price in the middle of February, increased by 6.3 per cent (up to 718.1 LTL/t) in March. Grain import to Lithuania was two times higher and export 50 per cent lower in February, 2011 than in February, 2010. In total, 33,481 thousand t of grain were imported in March this year. Wheat made up the biggest part (28,061 thousand t), which was imported from Latvia, Germany and Denmark (average price 829.6 LTL/t). Rye (194.2 t) was imported from Latvia and
Poland (average price – 767.2 LTL/t). Corn import made up 4,350 thousand t and it was 50 per cent higher amount than in February, 2010. It was imported from Poland and Moldova (average price 736.1 LTL/t). In February, 2011, rape import made up 4,888 thousand t and it was 50 per cent higher amount than in February, 2010. It was imported from Latvia and Holland (average price 1,699.6 LTL/t). In February, 2011, Lithuanian grain procurement companies exported 54,929 thousand t of grain. Most of it was wheat–48,483 thousand t. It was exported to Latvia, Germany, Denmark, Belgium, Holland and Finland (average price 832.8 LTL/t). Barley (5,947 thousand t) was exported to Latvia, Estonia, Poland, Germany, Denmark and Ireland (average price 650.9 LTL/t). In February, this year, rape export decreased by 71 per cent (up to 4,680 thousand t) comparing to the same period last year.
This year there are less grain left in storages of Lithuanian grain growers than last year According to the data of March, 2011, collected from Lithuanian farmers and agriculture companies, which grow ≥50 ha of corn plants and rape, their storages contained 139.7 thousand t of grain for selling–61.4 per cent lower amount comparing to March, 2010. Wheat farmers and agriculture compa-
nies on 15th March, this year, had 88.5 thousand t (minus 59.2 per cent) of wheat, 26.7 thousand t (minus 67.6 per cent) of barley, only 2.9 thousand t (minus 87.9 per cent) of rye and 9.7 thousand t (minus 57.4 per cent) of triticale in their storages.
Tentative data about grain and rape amounts, kept in storages for sale by Lithuanian corny crops and rape growers Amount of grain, kept in storages for sale, in thousand tons * According to 15.03.2010 According to 15.02.2010 According to 15.03.2011 data data data
Grain Oats Wheat Triticale Barley Rye Buckwheat Peas Rape
326,1 6,2 217,1 22,7 82,5 24,2 0,9 8,5 4,4
417,2 4,4 319,7 20,2 55,7 7,3 1,4 8,4 15,9
139,7 2,1 88,5 9,7 26,7 2,9 0,9 2,7 7,5
A 672 million t wheat harvest is expected in the world in 2011-2012 According to the tentative February forecast of International Grain Council (IGC), wheat supply and demand should be balanced during 2011-2012 harvest year. In 2011, high grain procurement prices should serve as a stimulus to expand crop areas in many countries, so it is forecasted that wheat crop areas may expand by 3 per cent– up to 224 million ha. It would be the largest wheat crop areas since 1998. Despite the concern about wheat harvest forecast, in some main countriesgrowers, wheat harvest should increase by 24 million t–up to 672 million t in 2011 and this would be the biggest harvest since wheat harvest record in 2008. In 2010–2011 reaping corn harvest in Southern hemisphere had just begun, so the plans for the coming harvest year (2011-2012) are not yet clear. In many countries they are indicated only formally. According to the primary data of IGC analysts, having evaluated corn crop areas and its fecundity in the countries growing corn (including USA and China), richer corn harvest is expected in 2011-2012. It is expected that owing to the forecasted fecundity, corn harvest in 2011-2012 should reach a new record. However, if fecundity does not prove out, then corn harvest forecast would be lowered (it would happen for the second year in a row). In 2011-2012 due to a high corn demand in the world and its limited supply, corn resource may decrease for the third year in a row.
Change % quarter
year
-66,5 -52,1 -72,3 -52,1 -52,1 -59,9 -40,1 -68,5 -52,6
-61,4 -66,2 -59,2 -57,4 -67,6 -87,9 -5,8 -68,9 71,9
* Amount of grain, kept in storages for sale by farmers, growing more than 50 hectares corny crop
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USA predicts big grain harvest, but high prices will remain Unexpectedly big harvest in Sothern hemisphere countries may reduce worldwide lack of grain, but high prices for the production will remain–these are the predictions given by the USA Government as announced by ”The Financial Times”. The US Department of Agriculture (USDA) forecasts than in Brazil, one of the greatest exporters of agriculture products, there will be a record soya harvest and that it will grow more corn than expected. These announcements relieve the concern about an extremely low supply which determined the increase of the prices of agriculture products. USDA sticks to its point of view that corn and soya resources are very small in the US. ”If there is something positive in this situation, it is the fact that it is not getting worse,” agricultural economy expert Chad Hart said. According to the newest USDA data, Brazil will cultivate 70 million tons of soya beans this year (a month ago 1.5 million tons smaller–68.5 million ton harvest was expected). Corn harvest in Brazil should reach 53 million tons (last month smaller harvest was expected–51 million tons). It is also forecasted that Argentina and Australia will grow more wheat than was expected before. Grain market accelerated in the middle of 2010, when the greatest drought of last decade devastated wheat crops in the
Black Sea region. Very hot summer also reduced corn harvest in the US at that time. The US ethanol industry also refined record corn amounts, using almost 40 per cent of all crops for that. When decreased supply raised prices, analysts started to fear that growing season in Southern hemisphere is being influenced by the Pacific Ocean phenomenon La Nina*. Summer brought drought to Argentina, which is the second biggest exporter of corn and the fourth biggest exporter of wheat. At the same time rain flooded eastern part of Australia (Australia is the third biggest wheat exporter). Due to downpours, soya sowing time was suspended in Brazil. But later crops regenerated surprisingly fast in Brazil and harvest was far bigger than was expected. By the way, now there is a fear that new rains might devastate the harvest during reaping period. When newest reports were announced, future transactions have decreased by 0.6 per cent–up to 6.9 US Dollars for a bushel (35.24 l) in Chicago market. But soya price even increased a little (by 0.2 per cent)–up to 13.47 US Dollars for a bushel. It seems that for now market is stiff and will not move until USDA officially announces the first tentative numbers on corn and soya sowing in 2011-2012 season. It should get clear by the end of this month.
Worldwide grain export prices Lt/t 2010
2011
State
Grain
February December January February Wheat JAV HRW 2 kat. JAV SRW 2 kat. Argentina ES, France, FCW 1 ES, Germany, B class ES, United Kingdom, forage Canada, CWRS 13,5% protein Corn
JAV 3 YC Argentina
Barley ES, France, forage Australia, forage Australia, malting
Price change % mounth year *** ** -3,6 64,2
529,4
878,9
901,6
869,5
503,9 549,9 421,2 450,1
850,1 790,0 868,4 892,0
856,1 830,8 913,3 924,3
804,0 882,1 894,3 899,7
-6,1 6,2 -2,1 -2,7
59,6 60,4 112,3 99,9
388,8 723,8
803,1 122,2
813,2 1164,2
819,1 1144,2
0,7 -1,7
110,7 58,1
429,7
695,8
686,9
741,0
7,9
72,5
416,9 352,9
706,3 722,0
699,5 760,1
723,3 718,3
3,4 -5,5
73,5 103,5
381,1 509,0
617,3 852,7
689,4 803,1
670,4 786,3
-2,8 -2,1
75,9 54,5
Record rape crop in Great Britain In trade years of 2011-2012 rape crop areas, comparing to last year, grew by 11.5 per cent or by 72 thousand ha– up to 696 thousand ha, and reached the record of the country in Great Britain. Rape crop expanded after reducing winter barley and oat areas by 7.8 and 16.6 per cent respectively. Farmers were prompted to grow more rape by high global price of these plants and good weather conditions favourable for sowing. Since December, 2010, farmers from Great Britain expanded wheat crop areas only by 0.2 per cent or by 5 thousand ha–up to 785 thousand ha. It is far less than was forecasted by the European Analysis Agency ”Strategy Grains”. Analysts predicted that wheat crop would expand by 1.3 per cent. B. Clinton warns farmers: ethanol may result in food crisis Former US President Bill Clinton warns farmers that too intense corn usage for ethanol production may determine the prices of food production and thus result in the crisis in poor countries. B. Clinton claims that he understands the importance of bio-fuel, but at the same time recommends looking outside the country. The US is a food supplier for many poor countries in the world and the least lack or increase of prices may cause severe consequences. The fund established by the former US President seeks to help the development of agrarian activities in African countries, but to date, these countries would not survive without the assistance from America. At the same forum, chief economist has declared that prices of food products will still grow this year. Now the US produces over 13 billion gallons of fuel from corn per year. A demand to strengthen bio-fuel production up to 36 billion gallon till 2022 was raised during the held Congress. Such amount would strongly influence food product prices and its supply for poor countries, so farmers are prompted to make flexible decisions, which could soften this situation.
HRW – Hard Red Winter, SRW – Soft Red Winter, FCW – French Channel Wheat, CWRS – Canada Western Red Spring, YC – Yellow Corn * prices (Lt) provided based on the currency exchange of the Bank of Lithuania on the respective date ** comparing February with January, 2011 *** comparing February , 2011 with February , 2010 Data sourse: Agro Rinkos , Nr. 5 (155)
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3 per cent bigger amount of certified field plant seeds was prepared in 2010 than in 2009 In 2010, 30,452 t of field plant seeds were prepared in total in Lithuania. Comparing to 2009, it was 3 per cent more of seeds, yet 15 per cent less than in 2008. Winter cereal seeds made up about 54 per cent, while summer cereal 36 per cent. Comparing to 2009, when amounts of certified seeds made up respectively 45 and 43 per cent, these proportions changed a little bit to the side of winter cereal. Last year, the production of oily plant seeds, comparing to 2009, also increased and made up 12 per cent of all amount of seeds. However, this increase emerged only due to the expansion of rape seed production, while flax seeds have not been certified for several years already. In 2010 feeding plant seed production decreased a little and reached 8 per cent of total seed amount. There is a very bad situation about buckwheat. Production of these seeds had been constantly decreasing for the latter five years and in 2010 it was not certified at all. In 2010 the amount of certified seeds of summer cereal, comparing to 2009, was 13 per cent smaller. Certified
potato seed production also decreased by 7 per cent last year. Lithuanian breeds of seed made up only 7.8 per cent of total seed amount. The biggest part of Lithuanian breeds was lupins and feeding herbage. Cereal group mostly contains foreign breeds. The most popular oat breed is Nelson, summer wheat – Monsun and Triso, winter wheat – Leiffer, rye – Agronom, winter barley – Fridericus, summer barley – Publican. All mentioned breeds are created in Germany, except for Publicant, created in Great Britain. This year, by March database of ecoseeds received information about 68.19 t of eco-seeds, to be provided to the market. Comparing this seed amount (289.58 t) to 2010, it makes up only 24 per cent. Most of it will be fully prepared for the market in March already. Market will receive about 46 t of ecopeas, almost 12 t of oat and some lupins, seeding tare and red clover. For the last two years market also had eco seed potatoes, but this year the only supplier of this potato kind abandoned eco farming.
Flooding takes toll on Australian grain industry The devastating flooding suffered by the Australian states of Victoria, Queensland and New South Wales in recent months constituted, in economic terms, the country’s worst ever natural disaster with rebuilding expected to cost over A$20 billion, or the equivalent of 1.5% of gross domestic product, according to government ministers. The implications for the grain and milling industries are likely to be two-fold. First, in the short term, there is transport chaos and diminished returns from eastern Australia. Secondly, there is the potential in the next planting season — barring any further “100year” weather events — for record production of grains fueled by high soil moisture levels and well stocked dams. the winter crop is estimated to be around 1.1 million tonnes lower than forecast in December. Production in
Western Australia is expected to be 1.4 million tonnes higher than earlier forecast, but this is more than offset by a 2.5-mil- lion-tonne lowering of the forecast for the eastern states, largely due to the heavy rains and flooding. However, from a national perspective, there had been strong growth in winter cereal production as compared to recent drought-affected years. Of the major winter crops, wheat production is estimated to have increased by 20% to around 26.3 million tonnes (up from the January estimate of 25.1 million tonnes), barley production by 18% to 9.3 million tonnes and canola by 11% to around 2.1 million tonnes, compared to the 2009-10 season.
In 2011 Belarus expects to get 9.9 million t of grain According to the data of the Ministry of Agriculture of Belarus, harvest of grain together with corn (bin weight) should make up 9.9 million t in 2011. It would be a sufficient amount of grain not only to satisfy the internal country needs, but also to export a part of it . In 2010 Belarus cultivated around 1 million t of wheat, and it is forecasted that wheat harvest will expand up to 450 thousand t in 2011. This amount should satisfy swine-breeding and aviculture needs. It is forecasted that corn harvest in 2011, comparing to 2010, may increase by 230 thousand t (up to 1 million t). The Ministry of Agriculture informs that winter cereal was sowed on time in 2010. There are not many crops, devastated by winter freeze; loss of separate breeds of crop may reach 10 per cent. Rape harvest should make up 890 thousand t in Belarus in 2011. “Strategie Grains” expanded forecast of wheat export in 2010-2011 According to the data of March forecast of French market analysts‘ agency “Strategie Grains”, export of soft wheat in the EU countries in 20102011 should expand by 0.6 million t (up to 19 million t). Selling of wheat in the EU countries should be expanded by reduced future transaction prices in France market due to natural disasters in Japan. It is forecasted that wheat resources should decrease by 1.1 million t (up to 8.7 million t) at the end of the harvest year 2010-2011, comparing the March forecast with the February forecast.
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MILK ECONOMY MARKET Average natural milk procurement price LTL/t of Lithuanian biggest milk shoppers Average natural milk procurement price, LTL/t Name of a company
Milk, for which Milk, for which deductions due any deduction to quality were due to quality not applied was applied
Average milk procurement price
AB "Pieno zvaigzdes" companies group UAB "Marijampoles pieno konservai" AB "Rokiskio suris" companies group AB "Zemaitijos pienas" UAB "Vilkyskiu pienine" AS (Agricultural society) "Salteksnis" UAB „Vikeda“, Kedainiai Bariunai AS (Agricultural society), Joniskis district Dairying cooperative "Zalmarge"
1085,4 1033,2 1019,5 1039,5 967,6 976,2 1373,9
777,3 692,7 704,2 876,3 704,2 1238,1
1076,9 1030,5 1011,3 1033,8 949,7 1052 1373,9
875 821,3
730,2 600,1
873 813,2
Average milk procurement price, Lt/t
1037,0
815,5
1030,4
In April-December, 2010/2011 quota year EU-27 milk procurement increased In April-December, 2010/2011 quota year EU -27 (including Malta forecast data on milk procurement), 102.73 million t of stock milk was bought–2.1 per cent more than at the same period of 2009/2010 quota year. Milk procurement during 2010/2011 quota year mostly grew in Ireland (12 per cent) and Latvia (6.7 per cent), and mostly decreased in Romania (8.2 per cent) and Hungary (8.9 per cent). In April –December, 2010/2011 quota year, milk, delivered to dairies, quota for reproduction was used 70.2 per cent, when at the same period in 2009/2010 quota year– 69.4 per cent. EU-27 2010, comparing to 2009, milk procurement grew by 1.23 per
In the II half-year of 2010, Lithuanian companies sold less cheese in Lithuania and other EU markets, however, sales to third countries grew. In the II half-year of 2010 Lithuanian milk reproduction companies sold 16.24 thousand t of fresh (not ripen or potted) cheese, including whey cheese and curd (PGPK code 1051403000) in Lithuania and 13.88 thousand t in other EU countries. This respectively made up 2.25 and 14.14 per cent less than in the II half-year of 2009. However, selling this product to third countries during the analysed period grew by 13.28 per cent and made up 3.59 thousand t. The biggest growth was of sales of fresh (not ripen or potted) cheese (PGPK code 1051403010) to third countries–from 94.92 t (in the II half-year 2009) to 227.95 t (in the II half-year 2010). In the II half-year of 2010, comparing to the same period in 2009, Lithuanian milk reproduction companies sold 27.57 per cent less mashed cheese, cheese powder, mould and other not processed cheeses (PGPK code 1051405000) (5.56 thousand t) in Lithuania. The amounts of sales of these products in other EU markets greatly decreased–by 46.20 per cent (up to 3.52 thousand t), however, export to third countries grew by 20.15 per cent and export amount made up 16.16 thousand t. The biggest growth (33.33 per cent) was of mashed cheese or cheese powder (PGPK code 1051405010) export to third countries. In the II half-year of 2010, comparing to the same period 2009, Lithuanian milk reproduction companies sold 1.38 thousand t, 2.24 per cent less of processed cheese, except for mashed cheese or cheese powder (PGPK code 101051407000). However, during the analysed period, selling amount of this product grew from 30.88 t to 88.89 t in the EU countries, and 132 t–104.32 t more than in the II half-year of 2009 in third countries.
cent or by 1653 thousand t and made up about 136 million t. Last year increased milk procurement EU-27 had influence on greater cheese, drinking milk, cream and pickled milk production, however, skim milk powder, butter and other milk fat production decreased. In 2010, comparing to 2009, EU-27 average annual milk procurement price grew higher from 92.60 LTL/100kg to 105.90 LTL/100kg. Smallest average EU-27 natural milk procurement price was in April, 2010– 99.23 LTL/100kg, and highest–in December (117.05 LTL/kg). 5
Rising of milk production in Oceania is not forecasted In the calendar year of 2010, comparing to 2009, New Zealand stock milk production grew by 1.1 per cent. During the first seven months (JulyDecember) of 2010-2011, comparing to the same period of last year, stock milk production was 2.6 per cent higher. Due to droughts in the II half of 2010, there was much less milk produced than was expected. Milk producers and reproducers change annual milk production forecasts–rising is not expected. Average forecasted stock milk price in 2010-2011 (JulyDecember) shall be 108.4 – 118.1 LTL/100kg. Comparing to 2009, Australia produced 0.3 per cent less stock milk in 2010. Recent floods had influence on two stock milk production regions – Queensland, where 6 per cent of all stock milk is produced, and Victoria,
where two thirds of all stock milk is produced. Quality of stock milk got worse in these regions and difficulties to transport milk to dairies occurred. Average price of stock milk in 20102011 (1 June- 31 May) should be 100.1 -103.6 LTL/kg. Due to the fact that rising of milk production is not forecasted in Oceania Region till 3-4 months before the end of stock milk production season, almost all milk production resources are kept for satisfaction of agreementdefined demand. During the remaining period before the end of production season, reproducers plan to equally distribute stock milk for all kinds of milk products.
EU gets prepared for electronic marking of livestock
“European Commission drafts a proposal on the creation of electronic marking system for livestock, which would change present plastic pins,” PPR website informs. Directorate General for Health and Consumers of the European Commission confirms that this step will assure food safety and control of livestock diseases. Veterinarians will play the main role in this process. The EC declares that digital marking is useful for farmers and food industry. System will be more accurate and
faster, so livestock will be observed more effectively. Identification data will be invaluable when managing bursts of diseases, it will help to stop fiddling and baseless breeding. With reference to economic calculation, electronic marking for one cow will cost 2-3 EUR. How will electronic tags look like? Mostly electronic plastic-coated ear pins are used; they are pinned or attached to the old pin. Another method–electronic capsule or electronic implant. Electronic capsules are given for the ruminant animals together with feed, when it gets into the gut, it stays in the stomach forever. Electronic implants are small transmitters, coated with indefectible material; they are implanted under animals’ skin.
In Estonia milk procurement prices grew by 21 per cent per year According to the data of Estonian Department of Statistics, average milk procurement price in the country grew by 21 per cent per year, reaching 313.81 EUR/ton (comparing February to the same month last year). It grew by 0.5 per cent per month (comparing February with January). Last month there was 46.4 thousand tons of milk bought–10 per cent less than a month ago, but 7.4 per cent more than a year ago. Average fat of milk, which was bought last month, was 4.1 per cent, protein rate 3.4 per cent. Chinese scientists created genetically modified cows that should produce milk similar to human ”Scientists have successfully created a herd of over 200 cows that are able to give milk having same qualities as humans‘ milk,” Ning Li, Director of the State Key Laboratories for AgroBiotechnology at the China Agricultural University, said. “According to him, it will be possible to buy products, similar to humans‘ milk at supermarkets in the nearest ten years–useful proteins of the milk will be affordable for ordinary consumers,” „Times of India, quoted by „Treehugger“, writes. According to Ning Li, milk of genetically modified cows also has more intense flavour than the usual cow or goat milk. ”Times of India” indicates that milk helps children to create stronger immune and nerve system–these qualities outrun cow and goat milk.
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Markets unsettled and weakening Middle East political unrest, signs of an economic slowdown in China, and the impact of Japan's disaster are continuing to create uncertainty for demand, with commodity prices weakening as buyers wait to see how far prices will drop from the current exceptionally high levels. Many buyers bought forward in expectation of a tight market over the next few months, and are now only buying for immediate needs. Both butter and cheese prices are unchanged. SMP prices have dropped by at least $100, while the WMP market is mixed. The Fonterra GDT auction on March 17
also saw prices fall after months of constant increases (see pi). US butter prices are a little lower but cheese prices are sharply lower after some large increases that dampened export demand. SMP/NDM prices are also falling but stocks are light and the USDA reports good underlying demand. Australia's ABARE expect both NZ and Australia to grow milk by around 2% annually over the next few years. Argenti-na's milk production is expected to rise sufficiently to enable the export of 200,000t of WMP in 2011.
Hihg hopes for more milk India hopes to raise milk output by 10% annually to become a major player globally and gain from rising prices, according to R.S. Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation. "If productivity increases, we can be a major player in the world dairy trade," said Sodhi, whose group in the western Indian state of Gujarat produced 3.3bn litres in 2009-2010 from 2.9m farmers. Milk costs in India jumped
20% in the past year. The country's $1.3tn economy has grown on average by 8.5% annually in the past 5 years, doubling incomes and lifting sales at local units of Nestle and Danone. India's per-capita milk us-age has surpassed that of Japan and South Korea, and is four times that of China. By 2030, milk consumption is expected to double, reaching 242m tonnes.
Milk tiped to reach 18.4c/lb The USDA have raised their average all-milk price forecast for 2011 by 2% to 18.4c/lb (42c/litre), 13% higher than in 2010 and only 4% less than the record 19.13c/lb in 2007. In their latest monthly supply-demand estimates, dairy product prices are forecast higher this month. The USDA now expect cheese prices to average about US$3,800/ tonne this year, 6% up from last month's forecast, but-ter prices up 1% to an average of $3,925/ t and SMP prices to average $3,065/t. Class III and Class IV price forecasts are raised to reflect the higher product prices. USDA now project that the Class III price will average 16.65c/lb and the average Class IV price is now projected to average 17.3c/lb this year. At the same time, USDA have trimmed their milk produc-tion fore-
cast by 100m lb to 196.0bn lb (86.3bn litres), although this is still up 3.2bn lb (1.4bn litres) from 2010's record output.
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AGRO TECHNIQUE MARKET Producers pay more attention to eco-technologies During ”SIMA” exhibition in France, corporate group SDF introduced new Deutz-Fahr tractor models that eject less harmful oxides, “Mano Ukis” (“My Farm”) redaction reports. Besides, all of them can be driven by bio-fuel solely. Last year in “EIMA” exhibition in Italy, this company introduced the most powerful Deutz-Fahr tractor Deutz-Fahr TTV 7.260 with hydromechanical stepless gearbox and environmentally-friendly selective catalytic reduction system SCR. When new standards on exhaust oxide came into force, many producers renew their technologies; however, new and more progressive models are also created. Company Deutz-Fahr has planned many innovations for this season. Powerful, easy to use and secure–these are the qualities of new DeutzFahr L 730. It is a powerful machine with 6 cylinder engine, meeting the Tier III requirements for oxide emissions. According to the producers, this model together with Deutz-Fahr L 710 is oriented to huge and average farms and the needs of service companies. Assortment of one of the most popular Deutz-Fahr Agrotron TTV model series is also being expanded.
In order to expand the assortment of tractor power even more, the series is complemented with three (maximum HP 121, 130 and 142) models: Agrotron TTV 410, Agrotron TTV 420 and Agrotron TTV 430. From now on the company will be able to suggest tractors from Agrotron TTV series for both stockbreeding and specialized farms. New models may be produced with the transmission adjusted for the speeds of 40 or 50 km/h.
According to Viktoras Rinkevicius, the Director General of “Birzu Zemtiekimas”, representing company of Deutz-Fahr, an exclusive quality of Deutz-Fahr tractors is the possibility to operate it solely on bio-fuel. ”Unfortunately, for now it is still unpopular to use an alternative fuel in our country. State Government does not prompt the development and use of alternative energy,” company director regrets. He pointed out that last year demand for telescopic dDIECI loaders grew, more equipment for stockbreeding farms and feeding techniques were bought. ”Now we already see that investment into stockbreeding farms will not decline. We have many orders. It means that dairy farming is getting better. Milk producers see perspectives and invest,” V. Rinkevicius comments. This year ”Birzu Zemtiekimas” starts selling Canadian fluid muck separators, possibility of the supply of mobile stoves is also negotiated. One of the greatest innovations of the company is Deutz-Fahr 6040 combines for small farms. ”This cereal cultivating technique should be impressive for its price and quality. This year company pays special attention to the improvement and expansion of combine assortment. New model will satisfy the needs of small farms and its price will not be frightening,” Darius Pekarskas, Director for Commerce of ”Birzu Zemtiekimo”, says.
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FERTILIZERS MARKET Despite weaker pricing, nitrogen markets across most of Europe remain inactive. Interest in DAP purchasing has surfaced in southern Europe and although new sales have yet to be agreed, price levels continue to look firm. Potash prices in France have been increased due to disruption of supply from Canada.
UREA Urea - China cfr bulk - $130-135 cfr. Nominal. Urea - East Europe/Black Sea fob bulk $104-108. Urea - Middle East $128-130 fob bulk. The outlook for urea prices remains bearish. Gradually, Black Sea producers are seizing opportunities to cover new business at lower prices in view of the thin export line-up after mid August. The prospect of Chinese demand is looking extremely unlikely for the third quarter and India alone will not support prices. AMMONIA Yuzhnyy fob - No change, FSU producers price ideas still around $135 fob, although at least one sale for
August shipment nets back to around $130 fob. US Gulf/Tampa cfr - No change - latest sales into Tampa at $169-170 cfr cash. The limited new sales activity in the market this week continues to reflect the recent trend in price movements. Offers in the latest FAI tender in India, at higher levels than last done, reflect the tighter supply situation in Asia. However, new business in Turkey, N.W. Europe and Brazil at similar or lower levels than last done highlights the weaker tone here due to ample supply availability in the western hemisphere.
Companies, supplying chemicals, want to partition the market Drifting closer to the spring sowing period, ”KG Group” and JSC ”Agrokoncernas”, the companies that supply fertilizers and plant preservative products to farmers, started to talk about partition of benefit of the sales of agriculture chemicals, and announced that they are planning to expand their market part and maybe not all former market leaders will have place left in Lithuania. ”This year we want to occupy up to 15 per cent of agriculture chemicals market. We are reproducers, we plan to start exporting grain and hope that we will be able to easily enter the market, using merchant credits. Farmers will be able to pay for fertilizers and chemicals with the harvest,” ”Verslo zinios” quotes „KG Group" Director Tautvydas Barstis. According to his calculations, ”KG Group” chemicals subdivision, though founded only last year, will reach 200 million turnover in 2011. ”Newcomers usually suggest low prices and aggressively seek to regain a part of the market; however, later those companies retreat or pass its positions. New members of the market do not frighten us,” Adomas Grigaitis, ”Litagros Prekyba” Director General, says. According to him, competitors, working illegally or half legally are more dangerous than those working legally.
PHOSPHATE DAP: $195-201 fob US Gulf. DAP: $208-215 fob bulk North Africa. DAP prices have edged up slightly this week in the US as the supply situation has tightened up. Rumours of potential demand in China for prompt shipment has also lead to a more bullish feel for the near term. SULPHUR Vancouver spot: $35-40 fob Middle East: $33-42 fob. Low end Iran Mediterranean (excluding Morocco): $45-51 cfr. Low end Tunisia. Morocco: $45-47 cfr - first half. Central Florida (liquid, LT): $66-68 delivered third quarter 97. The Indian market shows little sign of any improvement. Next week could see some settlements in the Mediterranean, possibly at a compromise level.
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MARKET OF AGRICULTURAL LAND Rent prices in agriculture areas will go lower in 2010 When a demand and selling prices are recovering in agriculture area market, average rent prices grew higher unmarkedly in 2010–4.6 per cent for farmland (average 139LTL/ha) and 2.8 per cent for meadow and pastures (114 LTL/ha). It has been influenced by the fact that many farmers chose an alternative to buy farmland, rather than rent it, because of temporarily dropped prices. For the same reason rent prices for the poorest farmland were still getting lower in some regions (Middle and East Lithuania). In Lithuania, average rent price for well valued farmland was about 200 LTL/ha (in more expensive places up to 250-325 LTL/ha), for average farmland about 140 LTL/ha and for poorest about 100 LTL/ha. In the same area, price of well valued farmland was ~38.5 per cent higher than average and poorly valued ~30 per cent cheaper. In general, in 2010 in Lithuania average and poor farmland prices grew higher (6.7 and 5.7 per cent respectively) and well valued farmland a little less (~2.5 per cent), because it did not lower during the crisis. Meadow and pasture rent prices in average or better areas was ~19–20 per cent cheaper than farmland, and for poorer farmland this difference was smaller and reached ~13 per cent. In Middle Lithuania, where areas are most fertile and agriculture is well de-
veloped, rent prices changed mildly. More notably they grew only in those districts, where they decreased in 2009–it is Panevezys district (~22–27 per cent for average and well valued farmland) and Marijampole district (~8–9 per cent). The biggest percentage price changes, showing agricultural optimism and market renewal, were not so intense in agricultural regions–Western and Southern Lithuania, where average rent price for average valued farmland grew by 17–21 per cent per year, and for poorest farmland even 30-41 per cent. In Middle Lithuania we can distinguish several spheres according to average valued farmland rent prices. In southern part, including a part of districts from neighbouring regions, dominant average rent prices are 180 –200 LTL/ha (210 LTL/ha in Sirvintos district), highest prices in Sakiai district (~240 LTL/ha). In northern part dominant rent prices in similar sphere around Joniskis district (~280 LTL/ha) includes Siauliai district, Pasvalys district and Birzai district (200– 220 LTL/ ha), also more reasonable prices of 140–160 LTL/ha (170 LTL/ha in Panevezys district), spreading also almost in all Western Lithuania. In Southern Lithuania and area around Vilnius dominant average rent prices are 100–130 LTL/ha, only in Kalvarija municipality and in Lazdijai district it reaches 150 and 170 LTL/ha.
Editorial: AB “Agrowill Group”, Smolensko g. 10, Vilnius Tel./fax +370 5 2335340; +370 5 2335345; e-mail: info@agrowill.lt Subscribe to free updates in the website www.agrowill.lt
In April, when usually there are many fires because of burning grass and stubble, firemen, environmental officers, foresters and the European Union (EU) assistance administrators prompt to save nature and remind about imminent sanctions. Sonata Miskiniene, Director of Direct Assistance Department of National Paying Agency (NPA) says that farmers will not get 500 thousand LTL allowances due to caused fires last year. ”One of the breaches is burning grass and stubble in the declared domains, therefore the Agency, upon getting those burning reports from regional environment departments, identifies applicants, in whose domain grass burning cases are identified and applies sanctions for requested allowances. The sanction is the reduction of the allowances by 23 per cent,” she said during the conference held on Wednesday. The Agency applied 84 sanctions for burning grass in 2010 in Lithuania. When the breach is made repeatedly, allowances are not paid in that and coming years. As President of the National Fire Protection, Fire and Rescue Department Audrius Ciuplys said during the Conference that this year they had already extinguished 19 grass fires, nine of them started in Vilnius district, where usually the biggest number of fires is recorded. Besides, it was determined by slowly processed land returning process. In order to avoid disasters, fire fighters and environmental officers plan common raids in April. Foresters also plan to hold duties.
Data sourses: Dairy Industry Newsletter 22 February , 2010, Vol 22, No. 21, Agro rinka, No 3 (153)/2010 m., vz.lt , fendt.com, .valstietis.lt; ukiozinios.lt; zum.lt, savasukis.lt, grynas.lt , ekonomika.lt, web sites of other companies and other public sources of information
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