USDA defends Brazil and Colombia coffee forecasts

USDA defends Brazil and Colombia coffee forecasts

WASHINGTON (Reuter): The U.S. Agriculture Department stands by its latest estimates of Brazilian, Colombian and Indonesian coffee production, despite questions raised by an international producer group headquartered in London, department forecasters said Tuesday.

In a prepared statement, the Association of Coffee Producing Countries expressed concerned that USDA's forecasts for many coffee producers were at odds with forecasts made by the countries themselves.

On Friday, USDA forecast Brazil's 1996-97 and 1997-98 coffee crops at 27.5 million and 28.0 million 60-kilo bags, respectively, compared to the Brazilian government's estimates of 25-26 million for 1996-97 and 22 million for 1997-98.

USDA also pegged the 1997-98 Indonesian coffee crop at 6.8 million bags, compared to Indonesia's own recent estimate of 4.83 million.

For Colombia, USDA forecast the 1997-98 crop at 11.3 million bags compared to the Coffee Growers Federation's forecast of 12 to 15 million, the ACPC noted.

David Stallings, acting chairman of USDA's specialty crops forecasting committee, said USDA is "comfortable" with its forecasts despite the concerns raised by the ACPC.

The high number for 1997-98 Brazilian production reflects a number of factors, including generally good growing conditions, an increased number of bearing trees and sharply higher prices than a year ago, Stallings said.

The last point suggests Brazilian farmers have spent more time and money caring for the 1997-98 crop, which should boost yields, he said.

"I think all of that together give a pretty good basis for saying they have a pretty good crop coming on," Stalling said.

A second USDA forecaster, who asked not to be identified, noted that German forecaster F.O Licht on Tuesday pegged the 1996-97 Brazilian crop at 28.5 million bags, which is even higher than USDA's most recent estimate.

A year from now, USDA could revise its estimate of 1996-97 Brazil production down to 26 million bags, in line with current Brazilian estimates, the analyst said. But "I still think it could go up," based on the pace of exports which suggest Brazil harvested a sizeable crop, he said.

USDA conducted field surveys in September 1996 and again in March-April to come up with estimates of Brazilian production.

But it also relied heavily on information gathered by USDA personnel in Sao Paulo, who talk regularly with producers and other people involved in the coffee trade, Stallings said.

USDA's forecast of 1997-98 Indonesia coffee production also reflects information gathered by its attache.

Although the attache's forecast is higher the Indonesian government's, "we have to rely on (the attache's) expertise in a case like that," Stallings said.

USDA expects higher prices will encourage Colombian producers to take "a little bit better" care of their trees following a period of neglect due to low prices, he said.

Reflecting that cautious attitude, USDA has forecast Colombia to produce 11.3 million bags of coffee in 1997-98, up from 10.3 million in 1996-97, but below the Coffee Growers Federation's forecast for the upcoming harvest.