Grain and Feed Report 2011

An Expert's View about Agriculture and Animal Husbandry in Italy

Last updated: 30 May 2011

Total cereals area in Italy is estimated at 3.2 million hectares (MHa), which is equivalent to about 25-30 percent of total Italian agricultural area.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 5/20/2011 GAIN Report Number: IT1117 Italy Post: Rome Italian Grain and Feed Report 2011 Report Categories: Grain and Feed Approved By: James Dever Prepared By: Stefano Baldi Report Highlights: MY 2011/2012 wheat sowings will decrease compared to previous MY due to heavy rain during the planting season. MY 2011/2012 soft wheat area is est. at 535,000 ha while durum wheat area should drop by 10 percent to 1.1 million ha. MY 2011/2012 corn planted area is expected to increase by 9 percent from previous MY to 1 million ha thanks to increased profitability linked to the price surge. MY 2011/2012 Italian rice planted area is expected to be at 244,000 ha, fairly stable to previous MY. General Information: Total cereals area in Italy is estimated at 3.2 million hectares (MHa), which is equivalent to about 25-30 percent of total Italian agricultural area. Despite the sharp decline in durum area over the past decade, durum is still the leading cereal crop, responsible for almost 40 percent of total Italian cereal area. Corn and soft wheat follow with 27 and 17 percent respectively. Durum is planted mainly in the south while soft wheat, corn, and rice are largely cultivated in northern Italy. Planted area trend for main cereals (?000 ha) - Source: Istat - Wheat Production, Supply and Demand of wheat (?000 ha, ?000 MT) Wh ate Estimate Forecast eat to Estimtal 2009/10 2010/11 2011/12 Marketing Year Begins 07/2009 07/2010 07/2011 Area 1,900 1,810 1,665 Beginning Stocks 1,810 1,910 1,540 Production 6,700 6,490 6,100 Intra EU27 imports 4,281 4,800 4,900 Extra EU27 imports 2,664 2,645 2,650 Total imports 6,945 7,445 7,550 TOTAL SUPPLY 15,455 15,845 15,190 Intra EU27 exports 1,686 1,755 1,780 Extra EU27 exports 893 1,364 1,340 Total exports 2,579 3,119 3,120 Food 8,513 8,843 8,680 Seed 389 368 361 Industrial 263 254 253 Feed 1,800 1,720 1,636 TOTAL consumption 10,966 11,186 10,930 Ending Stocks 1,910 1,540 1,140 TOTAL DISTRIBUTION 15,455 15,845 15,190 Production MY 2011/12 wheat area is forecast to decrease, compared to the previous year. MY 2011/12 soft wheat area is forecast to decrease 5 percent to 535,000 hectares (Ha) while durum wheat area is forecast to decline by 10 percent to approximately 1.1 million Ha. The decrease in area is mainly due to heavy rain that occurred during planting, especially in northern Italy. Nevertheless, good weather at the beginning of 2011 allowed additional durum sowing, especially in southern Italy. Additionally, the fall surge in corn and soft wheat prices encouraged many farmers shift from durum to corn. Both soft and durum wheat prices peaked in 2010 at 2008 levels. However, soft wheat prices increased at a faster pace, exceeding durum wheat prices. Large stocks at the beginning of MY 2010/2011, stagnating demand, and steady supply curbed increases in durum wheat prices. Durum wheat prices are generally higher than soft wheat due to higher production costs, lower yields, and inelastic supply. Soft and durum wheat weekly farm gate price trend (?/MT) Source: ISMEA. Consumption Italian soft wheat consumption fluctuates around 8 million metric tons (MMT), mainly destined for the milling industry (approximately 70 percent) and to the feed industry (20 percent). Italian durum wheat supply fluctuates around 7.5 MMT--almost all of which is utilized by the pasta industry. Trade Italy imports good quality soft wheat for milling mainly from France and Germany, with smaller amounts from Canada, Australia, the United States, and Kazakhstan. Italy imports medium- quality, low-price feed wheat from Ukraine and Russia. However, in MY 2010/2011 feed wheat imports from Ukraine were replaced by increased imports from France, Hungary, Romania, Bulgaria and other eastern-EU countries. Italy is the third largest durum wheat market in the world importing around 2.2 MMT, mainly from Canada, the United States, France and Mexico and recently also from Greece and Turkey. Pasta is mainly consumed in the domestic market but significant quantities are exported to EU (Germany, France, UK) and non-EU countries (United States and Japan). Soft wheat imports by trade partner ('000 MT) 2008/2009 2009/2010 Jul-Jan 2009-2010 Jul-Jan 2010-2011 EU-27 2,945 3,700 1,991 2,436 France 1,406 1,520 819 953 Germany 557 627 341 202 Austria 246 475 255 306 Hungary 302 455 236 383 Romania 187 178 129 149 Bulgaria 106 141 57 101 Extra EU-27 1,202 935 654 556 Canada 273 225 141 139 Croatia 29 153 108 82 Russia 219 133 106 18 Australia 88 120 83 21 World 4,146 4,635 2,644 2,991 Source: GTA. Durum wheat imports by trade partner ('000 MT) 2008/2009 2009/2010 Jul-Jan 2009-2010 Jul-Jan 2010-2011 EU-27 656 480 259 571 France 426 203 96 227 Greece 105 159 90 268 Spain 67 38 21 13 Extra EU-27 1,031 1,720 1,138 1,221 Canada 350 621 423 606 Mexico 182 332 332 208 United States 272 330 226 255 Turkey 0 254 74 35 Australia 185 125 56 81 Kazakhstan 13 27 24 33 Tunisia 20 27 0 0 World 1,687 2,200 1,396 1,792 Source: GTA. Pasta exports by trade partner ('000 MT) 2008/2009 2009/2010 Jul-Jan 2009-2010 Jul-Jan 2010-2011 EU-27 1,007 1,055 605 615 Germany 319 328 188 185 France 227 251 148 149 UK 192 204 115 119 Netherlands 40 42 25 23 Sweden 41 40 24 23 Austria 28 29 17 17 Belgium 29 28 17 15 Extra EU-27 499 524 290 330 United States 101 115 68 71 Japan 79 84 45 45 Switzerland 26 28 16 16 Russia 22 24 12 21 World 1,506 1,579 895 945 Pasta includes durum wheat uncooked pasta and couscous (HS codes 190219, 190230, 190240), not converted to wheat grain equivalent. Source: GTA. Corn Production, Supply and Demand of corn (?000 ha, ?000 MT) Co te Estimate Estimate Forecast rn Estima 2008/09 2009/10 2010/11 2011/12 Marketing Year Begins 10/2008 10/2009 10/2010 10/2011 Area 990 930 915 1,000 Beginning Stocks 1,100 1,300 1,000 500 Production 9,460 8,650 8,780 9,485 Intra EU27 imports 1,856 2,012 2,100 2,000 Extra EU27 imports 292 203 250 200 Total imports 2,148 2,216 2,350 2,200 TOTAL SUPPLY 12,708 12,166 12,130 12,185 Intra EU27 exports 51 121 130 90 Extra EU27 exports 37 12 25 15 Total exports 88 133 155 105 Food 340 330 335 340 Seed 33 33 35 35 Industrial 1,000 970 1,000 1,000 Feed 9,947 9,700 10,105 9,955 TOTAL consumption 11,320 11,033 11,475 11,330 Ending Stocks 1,300 1,000 500 750 TOTAL DISTRIBUTION 12,708 12,166 12,130 12,185 Production MY 2011/12 corn area is forecast to increase 9 percent from the previous year to approximately 1 million ha. The surge in corn prices combined with reduced wheat area due to heavy fall rains, encouraged farmers to shift from winter (wheat) to spring crops (corn, soybean and sunflower). MY 2011/2012 Italian corn production is forecast to increase while MY 2010/2011 final stocks are forecast to decline sharply due to high profits expectation. MY 2010/11 corn production reached 8.8 MMT, slightly up from previous MY despite the decline in planted area. Average yields increased notwithstanding difficulties caused by heavy rains that occurred during harvest. Corn weekly farm gate price trend (?/MT) Source: ISMEA. Consumption More than 85 percent of Italy?s corn supply is consumed by the livestock sector, either as simple or compound feeds. The remainder is utilized to make starch (8-9 percent), food products (around 3 percent) and for seeds (0.3 percent). The Italian starch industry produces starch for ingredients for the beverage and sweet industry, for industry (paper, pharmaceutical, chemical industry) and feed (corn gluten meal and feed). A small but increasing share of total consumption is also employed by biogas plants. Trade Italy imports about 2 MMT of corn annually. The majority of the imported corn come from EU-27 Member States and from other Eastern European countries. Corn imports by trade partner ('000 MT) 2008/2009 2009/2010 Oct-Jan 2009-2010 Oct-Jan 2010-2011 EU-27 1,856 2,010 779 841 Hungary 989 943 329 395 France 227 391 148 72 Austria 354 327 157 152 Slovenia 79 152 62 79 Germany 116 87 49 35 Romania 28 63 20 85 Netherlands 26 20 8 0 Bulgaria 5 15 0 19 Extra EU-27 292 203 130 194 Croatia 197 119 98 45 Serbia 75 62 26 37 World 2,148 2,213 909 1,035 Source: GTA. Rice Production, Supply and Demand of rice (?000 ha, ?000 MT) R Estimate Estimate Forecast ice 2009/10 2010/11 2011/12 Marketing Year Begins 09/2009 09/2010 09/2011 Area 238 248 244 Beginning Stocks 210 197 104 Milled Production 975 948 967 Rough Production 1620 1516 1586 Milling Rate 6020 6249 6100 Intra EU27 imports 31 30 25 Extra EU27 imports 67 65 55 TY Imp. From US Total imports 98 95 80 TOTAL SUPPLY 1,284 1,239 1,151 Intra EU27 exports 653 675 680 Extra EU27 exports 128 150 150 Total exports 781 825 825 Domestic consumption 307 310 300 TOTAL consumption 307 310 300 Ending Stocks 197 104 26 TOTAL DISTRIBUTION 1,284 1,239 1,151 Statistics reported on a milled equivalent basis (expect for rough production) Italy is the largest rice producer in the European Union with approximately 50 percent of the total EU-27 harvest. Although Italy accounts for less than 1 percent of global production, it is currently the fourth-largest rice-exporting country after Thailand, United States, and India (counting intra- EU trade). Rice cultivation in Italy is mostly located in the northern regions (Piemonte, Lombardia and Veneto) where water is relatively abundant (and cheap) and the rice crop can be raised in flooded fields. Numerous varieties are cultivated in Italy, of which around 70 percent are ?indica? varieties (Ariete-Drago, Arborio, Baldo, S.Andrea, Carnaroli) and the remainder are ?japonica? varieties. Rice area (around 240,000 ha) has been increasing for the last decade due to improved agronomic techniques, good export performance, and higher profitability compared to other arable crops (such as irrigated corn). The combination of high-quality varieties, farms sufficient large to realize economies of scale, and the EU?s coupled rice payments allow Italian rice producers to compete well with other EU rice producers. Production MY 2011/12 rice area is forecast at 244,000 ha. Or about the same as the previous year, which was a record. However, beginning in MY 2012/2013, reforms of the EU coupled payments will increase the uncertainty over the future profitability of rice farming in Italy. Despite increased area, MY 2011/12 rough rice production of 1.5 MMT, represents a 6-percent decline due to a sharp fall in yields as a result of heavy rains and low temperatures in May 2010. Nevertheless, crop quality was good. Consumption Except for rough (unmilled) rice exports and domestic seed sales, virtually all Italian rice is marketed as a whole-kernel milled product. Italian domestic rice consumption is stable at 300,000 MT, equal to approximately 30 percent of total production. Trade Italy exported 781,000 MT or rice (milled equivalent basis) in MY 2009/2010, almost 70 percent of total production. A large part of Italy?s rice is exported to the EU-27, especially to France, Germany and UK. However, an increasing share is exported to extra-EU Mediterranean countries, including Turkey and Syria, due to the export ban in Egypt. Milled rice* exports by trade partner ('000 MT) 2008/2009 2009/2010 Sep-Jan 2009-2010 Sep-Jan 2010-2011 EU-27 534 588 249 271 France 131 123 50 53 Germany 102 119 57 51 UK 73 80 35 25 Czech Republic 32 40 16 20 Netherlands 17 40 14 24 Poland 19 36 17 24 Hungary 35 23 10 13 Belgium 31 21 8 9 Extra EU-27 90 118 39 50 Turkey 3 38 16 16 Syria 20 20 2 6 World 624 705 288 321 *HS codes 100630 - 100640 Source: GTA. Other grains Production, Supply and Demand of barley, (?000 ha, ?000 MT) Ba Estimate Estimate Forecast rley 2009/10 2010/11 2011/12 Marketing Year Begins 07/2009 07/2010 07/2011 Area 307 274 324 Beginning Stocks 100 100 100 Production 1,049 991 1,165 Intra EU27 imports 777 780 630 Extra EU27 imports 27 10 8 Total imports 804 790 638 TOTAL SUPPLY 1,953 1,881 1,903 Intra EU27 exports 6 7 10 Extra EU27 exports 0 0 0 Total exports 6 7 10 Food 100 100 100 Seed 79 74 80 Industrial 424 410 410 Feed 1,244 1,190 1,203 TOTAL consumption 1,847 1,774 1,793 Ending Stocks 100 100 100 TOTAL DISTRIBUTION 1,953 1,881 1,903 Production, Supply and Demand of sorghum, (?000 ha, ?000 MT) So imate Estimate Forecast rghum Est 2009/10 2010/11 2011/12 Marketing Year Begins 07/2009 07/2010 07/2011 Area 40 41 63 Beginning Stocks 0 0 0 Production 243 271 388 Intra EU27 imports 13 10 11 Extra EU27 imports 0 0 0 Total imports 13 10 11 TOTAL SUPPLY 256 281 399 Intra EU27 exports 9 10 10 Extra EU27 exports 0 1 1 Total exports 10 11 11 Food Seed 1 1 1 Industrial Feed 246 269 387 TOTAL consumption 247 270 388 Ending Stocks 0 0 0 TOTAL DISTRIBUTION 257 281 399 Production, Supply and Demand of oat (?000 ha, ?000 MT) Oat Estimate Estimate Forecast 2009/10 2010/11 2011/12 Marketing Year Begins 07/2009 07/2010 07/2011 Area 134 114 121 Beginning Stocks 40 40 40 Production 314 279 290 Intra EU27 imports 32 53 30 Extra EU27 imports 1 2 1 Total imports 33 55 31 TOTAL SUPPLY 387 374 361 Intra EU27 exports 0 7 5 Extra EU27 exports 0 4 2 Total exports 0 11 7 Food 54 53 50 Seed 34 30 30 Industrial Feed 259 240 234 TOTAL consumption 347 323 314 Ending Stocks 40 40 40 TOTAL DISTRIBUTION 387 374 361 ITALIAN CEREALS ASSOCIATIONS ANACER Italian cereal traders association Contact info: Via Lovanio 6 - 00198 Rome Tel +39 068416554 ITALMOPA Italian wheat millers association Contact info: Via Lovanio 6 - 00198 Rome Tel +39 066785409 E-mail italmopa@italmopa.com Website: www.italmopa.com AIDEPI (UNIPI) Pasta and pastries industry association Contact info: Via Rhodesia 2 - 00144 Rome Tel +39 068091071 E-mail aidepi@aidepi.it Website: www.aidepi.it AIRI Italian rice millers association Contact info: Via B. da Feltre 6 ? 27100 Pavia Tel +39 0382720479 E-mail airi@rice.it Website: www.rice.it Abbreviations and definitions used in this report: Ha Hectare; 1 ha = 2.471 acres MT Metric ton = 1,000 kg MS EU member state(s) MY Marketing Year. Post and USDA official data both follow the EU local marketing year of July to June except for corn which follows an October to September calendar and for rice which follows a September to August calendar. Trade data cited in this report was derived by using the following tariff codes: All wheat (including flour, durum wheat, semolina, uncooked pasta and couscous): 1001, 1101, 190219, 190230, 190240 Corn: 1005 Rice: 1006 Barley: 1003 Oat: 1004 Rye: 1002 Sorghum: 1007 Conversion factors and methods used in this report Flour, semolina and wheat products (uncooked pasta and couscous) are converted to Wheat Grain Equivalent by multiplying the product weight by 1.368. Rough or Paddy rice (100610) trade data X 0.70 =milled equivalent basis Brown rice trade data X 0.88 = milled equivalent basis Sources used in this report: GTA Global Trade Atlas Istat Istituto Statistico Italiano/Italian statistical center ISMEA Istituto di Servizi per il Mercato Agricolo Alimentare/Center providing services for the agricultural and food market
Posted: 28 May 2011, last updated 30 May 2011

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