Voluntary Report - public distribution

**Date:** 9/30/2004

**GAIN Report Number:** PL4033

PL4033

**Poland**

**Grain and Feed**

**Grain Update**

**2004**

**Approved by:**

![](media/image1.wmf)Wayne Molstad, Agricultural Counselor

U.S. Embassy

**Prepared by:**

WFM

**Report Highlights:**

The latest official estimates confirm new record level 2004 grain
production in Poland. The official crop estimates are within the range
of 1-2 MMT higher than the official July estimates and about one MMT
higher than previous FAS Warsaw estimates.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Warsaw \[PL1\]

\[PL\]

# OFFICIAL GRAIN PRODUCTION ESTIMATES REVISED:

On September 23 the Polish Main Statistical Office (GUS) published its
second 2004 official crop estimate. According to the new publication,
GUS estimates total grain production at about 29 MMT, 1-2 MMT larger
than the first estimate published at the end of July. The current GUS
crop estimate is based on crop area and yield estimates, crop checking
and due to estimates of GUS's local and central experts.

This year's crop was influenced by unusually favorable
agro-meteorological conditions. There were very good weather conditions
during the entire growing season, from sowing until harvest. The very
good weather conditions were particularly favorable for grain and
rapeseed. In addition to the influence of excellent weather conditions,
the larger crop was achieved also due to an increase in acreage. In
addition, the grain structure was better as there was a larger share of
higher yielding grains. The higher-yielding grain area was particularly
evident on large-scale farms. These farms usually have a sufficient
supply of certified seeds and larger use of fertilizers and plant
protection chemicals. Plant health conditions were also better than last
year. There was less disease and insect presence, which also fostered
higher yields.

The relatively large correction in GUS's estimate is a result of the
weather's impact on crops during harvest time that was not considered in
the earlier estimate. This weather extended the final growing stage for
kernels and allowed them to mature properly. Harvest losses resulting
from wet conditions were rather minimal. Each type of grain is estimated
to be at least 20 percent larger compared to the previous year.

GUS estimates a 2004 total grain area of 8.4 million hectares, 2.7%
larger than in 2003, but 4.7% smaller than the average area for
1996-2000. The average 2004 grain yield is estimated at 3.46 tons per
hectare, which is 20.6% above the average yield in 2003 and 21.0% over
the 1996-2000 average.

The total grain crop is estimated at 29.0 MMT, which is 5.6 MMT or 24.1%
above 2003 production and 3.8 MMT or 15.3% more than the average for
1996-2000. Of total grain production, wheat is estimated at 9.5 MMT,
21.1% more than in 2003; rye at 4.2 MMT, 33.2% more than a year ago;
barley at 3.5 MMT, 24.1% more; oats at 1.4 MMT, 20.3% more; triticale
3.6 MMT, 28.9% more than a year ago; mixed grain at 4.3 MMT, 17.3% more;
and corn at 2.4 MMT, 29.3% more than in 2003.

# MARKET DEVELOPMENTS: 

As a result of these levels of grain production, a new record production
level has been set at about 1 MMT or 3.5% above the 1990/91 level
previous record output. Wheat is placed on about the same level as the
MY1998/99 record production. Corn production is at a new record high
acreage of 415,000 hectares and triticale production is also at a new
record, 8% above the 2002 previous record output.

**- Stocks and Quality**

In spite of the record high production and reduced demand for feed
grains, the market grain situation seems to be stable. Grain stocks,
which were sharply reduced after last year's scarce supplies, absorbed a
significant portion of the new crop to rebuild stock levels. Grain
prices although significantly lower than a year ago, have been stable
over the last few weeks. Food wheat averages about or slightly more than
PLN 450 (USD 127, Euro 103). There are occasional reports of shortages
of food wheat. According to early laboratory test results, only about
50% of this year's wheat production meets proper quality parameters, 10%
of this wheat is difficult to be classified (food or feed) and 40% is
only feed wheat. Poor wheat falling numbers and low gluten are major
factors which affect wheat classification. There are regions of Poland
where all the wheat is of excellent quality with very high yields
(harvested earlier), while there are regions where rains during harvest
resulted in poor quality.

**- Prices**

In addition to quality, producer speculation on higher prices within the
intervention is also blamed for limited market supplies of food wheat.
According to some sources, the price disparity between low and high
quality wheat will be greater later in the MY because of the relatively
large quantity of low quality wheat. Feed wheat is traded at PLN 415-425
per ton (USD 117-120, Euro 95-97) or slightly below PLN 400 on farm.
Feed barley is traded at PLN 400 (USD 113, Euro 92) and brewing barley
at about PLN 100 (USD 28, Euro 23) more. Rye is traded at PLN 300-320
per ton (USD 85-90, Euro 67-73). Upcoming first corn from the new
harvest has been seen on the market at about PLN 500 per ton (USD 141,
Euro 114), somewhat lower than corn from the old harvest.

**- Feed Use**

Small market supplies when compared with a large crop and stable grain
prices suggest farmer's orientation on relatively strong grain on-farm
feed use. The swine population at the end of July was almost 9% lower
than at the same time a year ago. The population of sows was 7% lower.
However, high slaughter livestock prices resulted in significantly
increased demand for breeding stock, which will increase the demand for
feed grain.

**- Trade**

There have been reports of grain exports from Poland. According to trade
sources, wheat has been exported to Algeria and some rye to Spain.
Sources also indicated that 100,000 tons of wheat have been shipped
outside of the EU market. Although falling number and gluten are poor,
protein levels in many cases meet some customers' requirements, which
make some cheaper wheat attractive for exporters. A relatively small
share of food wheat may lead to some quality wheat imports during the
current MY. It is possible that with a prevailing weak dollar,
elimination of the long standing rag weed (ambrosia) issue and zero
tariffs on high quality wheat after Polish May 2004 accession to the EU,
prospects for some U.S. wheat imports, particularly durum wheat, will
rise.

Below are revised grain production and use tables for Poland:

  -- ----------------- -- ---------- -- ---------- -- ------------- -- ----------------
                                                                       

     **WHEAT**            2002/03       2003/04       2004/05          2004/05

     \-                   MY 2002       MY 2003       MY 2004 OLD      MY 2004 NEW

     AREA HARV.           2414          2308          2450             2420

     BEG.STOCKS           1348          624           382              382

     PRODUCTION           9304          7858          9400             9520

     TOT.MY IMPORT        125           800           200              200

     JUL-JUNE IMP.        125           800           200              200

     JUL-JUNE I.US        0             5             5                25

     TOT.SUPPLY           10777         9282          9982             10102

     TOT.MY EXP.          1093          0             0                120

     JUL-JUNE EXP.        1093          0             0                120

     FEED CONSUMP.        3960          3800          3900             3900

     N-FEED CONS.         5100          5100          5100             5100

     TOT.DOM.CONS.        9060          8900          9000             9000

     END.STOCKS           624           382           982              982

     TOT.DISTRIB.         10777         9282          9982             10102

                                                                       
  -- ----------------- -- ---------- -- ---------- -- ------------- -- ----------------

  ----------------- ----------- ----------- -------------- ----------------
  **CORN**          2002/03     2003/04     2004/05        2004/05

  \-                MY 2002     MY 2003     MY 2004 OLD    MY 2004 NEW

  AREA HARV.        319         356         360            415

  BEG.STOCKS        457         648         432            432

  PRODUCTION        1962        1884        2000           2400

  TOT.MY IMPORT     136         400         0              0

  OCT-SEP. IMP.     136         400         0              0

  OCT-SEP. I.US     0           0           0              0

  TOT.SUPPLY        2555        2932        2432           2832

  TOT.MY EXP.       7           0           0              0

  OCT-SEPT. EXP.    7           0           0              0

  FEED CONSUMP.     1809        2408        1900           2000

  N-FEED CONS.      91          92          100            150

  TOT.DOM.CONS.     1900        2500        2000           2150

  END.STOCKS        648         432         432            682

  TOT.DISTRIB.      2555        2932        2432           2832
  ----------------- ----------- ----------- -------------- ----------------

  ----------------- ----------- ----------- -------------- ----------------
  **BARLEY**        2002/03     2003/04     2004/05        2004/05

  \-                MY 2002     MY 2003     MY 2004 OLD    MY 2004 NEW

  AREA HARV.        1051        1016        1070           1060

  BEG.STOCKS        348         300         181            181

  PRODUCTION        3369        2831        3500           3510

  TOT.MY IMPORT     153         350         150            150

  OCT-SEP. IMP.     154         350         150            150

  OCT-SEP. I.US     0           0           0              0

  TOT.SUPPLY        3870        3481        3831           3841

  TOT.MY EXP.       0           0           0              0

  OCT-SEPT. EXP.    0           0           0              0

  FEED CONSUMP.     2867        2600        2700           2700

  N-FEED CONS.      703         700         700            700

  TOT.DOM.CONS.     3570        3300        3400           3400

  END.STOCKS        300         181         431            441

  TOT.DISTRIB.      3870        3481        3831           3841
  ----------------- ----------- ----------- -------------- ----------------

  ----------------- ----------- ----------- -------------- ----------------
  **RYE**           2002/03     2003/04     2004/05        2004/05

  \-                MY 2002     MY 2003     MY 2004 OLD    MY 2004 NEW

  AREA HARV.        1560        1479        1600           1590

  BEG.STOCKS        542         324         196            196

  PRODUCTION        3831        3172        4100           4220

  TOT.MY IMPORT     61          200         0              0

  OCT-SEP. IMP.     83          200         0              0

  OCT-SEP. I.US     0           0           0              0

  TOT.SUPPLY        4434        3696        4296           4416

  TOT.MY EXP.       10          0           0              0

  OCT-SEPT. EXP.    11          0           0              0

  FEED CONSUMP.     2135        1531        1730           1730

  N-FEED CONS.      1965        1969        2050           2170

  TOT.DOM.CONS.     4100        3500        3780           3900

  END.STOCKS        324         196         516            516

  TOT.DISTRIB.      4434        3696        4296           4416
  ----------------- ----------- ----------- -------------- ----------------

  ----------------- ----------- ----------- -------------- ----------------
  **OATS**          2002/03     2003/04     2004/05        2004/05

  \-                MY 2002     MY 2003     MY 2004 OLD    MY 2004 NEW

  AREA HARV.        605         527         565            550

  BEG.STOCKS        73          77          59             59

  PRODUCTION        1486        1182        1460           1420

  TOT.MY IMPORT     3           0           0              0

  OCT-SEP. IMP.     4           0           0              0

  OCT-SEP. I.US     0           0           0              0

  TOT.SUPPLY        1562        1259        1519           1479

  TOT.MY EXP.       5           0           0              0

  OCT-SEPT. EXP.    4           0           0              0

  FEED CONSUMP.     1317        1040        1280           1240

  N-FEED CONS.      163         160         160            160

  TOT.DOM.CONS.     1480        1200        1440           1400

  END.STOCKS        77          59          79             79

  TOT.DISTRIB.      1562        1259        1519           1479
  ----------------- ----------- ----------- -------------- ----------------

  ----------------- ----------- ----------- -------------- ----------------
  **MIX.GR &        2002/03     2003/04     2004/05        2004/05
  TRIT.**                                                  

  \-                MY 2002     MY 2003     MY 2004 OLD    MY 2004 NEW

  AREA HARV.        2310        **2440**    2400           2390

  BEG.STOCKS        795         518         238            238

  PRODUCTION        6886        6420        7300           7850

  TOT.MY IMPORT     16          0           0              0

  OCT-SEP. IMP.     17          0           0              0

  OCT-SEP. I.US     0           0           0              0

  TOT.SUPPLY        7697        6938        7538           8088

  TOT.MY EXP.       1           0           0              0

  OCT-SEPT. EXP.    1           0           0              0

  FEED CONSUMP.     **6673**    6196        6365           6515

  N-FEED CONS.      505         504         505            505

  TOT.DOM.CONS.     7178        6700        6870           7020

  END.STOCKS        518         238         668            1068

  TOT.DISTRIB.      7697        6938        7538           8088
  ----------------- ----------- ----------- -------------- ----------------