The total MY2019/20 EU28 grain crop is about 2 MMT higher than the previous forecast, at almost 313.5 MMT. Higher wheat, corn and barley production is partially offset by a lower mixed grain production.
Higher than previously forecast food, seed and industrial use is largely offset by a reduction in forecast feed use, but it is still significantly up year-on-year. The overall situation means a relatively buoyant outlook for EU28 grain supplies, planting conditions are mixed.
A record grain harvest was achieved in Estonia. Wheat production increased by 80% in comparison with the record low of the previous harvest. Near record levels were also reached in Latvia and Lithuania with soft wheat output, although grain quality and output were regionally diverse. Soft wheat export potential from the Baltics to non-EU countries will increase significantly.
Good conditions through the spring and adequate rainfall meant that Bulgaria harvested a larger than expected wheat crop. Corn production also expanded due to a larger area planted and harvested, but the average corn yields fell below the earlier forecast due to dry and hot weather in the second half of July and August. Due to reduced swine inventories as a result of the African Swine Fever outbreak, feed use is likely to decrease and result in more grain available for export. As of mid-November, wheat exports are significantly up year-on-year due to favourable demand in the Black Sea region.
The Czech Republic and Slovakia have seen better than expected wheat and barley crops, but the opposite for corn due to the summer drought and increased rodent damage.
Despite the heatwave that hit France in mid-2019, both the barley and soft wheat crops achieved almost record yields with excellent quality due to good conditions throughout the growing season. However, the corn was affected by the drought that lasted until late September, which lowered both acreage (through a transfer from corn grain to corn sileage) and yield. Heavy rains then hampered the corn harvest, especially in the northern half of France where, as of mid-November, a sizeable part of the crop (about 20%) is still unharvested. Higher volumes of wheat were exported to West and North Africa (notably Morocco), Egypt and China, benefiting from a lower euro and good price competitiveness.
High temperatures and windy weather in late June caused grain yields to suffer, resulting in early maturation. As a result, production was lower than previously forecast, especially for wheat.
The rice harvest commenced at the end of September. Some delays were incurred by a period of wet weather at the end of October and beginning of November but it is now nearing completion and the outlook is positive.
MY2018/2019 saw a record volume of corn imported by the Netherlands, and corn imports are forecast to remain high in MY2019/20 based on an abundance of corn in Brazil and Ukraine. Imports from EU member states are forecast to remain steady due to the good EU harvest. Overall the feed uptake of corn will increase at the expense of wheat.
In the Nordics, wheat and barley crops significantly increased, mainly a recovery from the low crops in MY2018/19. As a result, feed use of wheat and barley is forecast to increase.
The area planted to corn in MY2018/19 increased for the first time since MY2014/15. However, low rainfall saw overall grain production fall despite an increase for corn. The poor grain crop but steady demand will increase the country’s grain deficiency to record import volumes. Total grain imports for MY2019/20 are anticipated to be close to the historical high achieved in MY2017/18 (17 MMT). Large grain imports, mainly corn, will be necessary to offset the reduced domestic crop. While most wheat and barley is imported from other EU countries, Ukraine has consolidated its position as Spain’s main corn supplier, followed by Brazil and other EU origins. Corn from the US is no longer price competitive following the imposition of retaliatory import duties by the EU. The feed industry is Spain’s primary grain consumer. Feed production continues to grow, driven by the increasing demand from Spain’s export-oriented livestock sector. Sorghum imports in MY2019/20 have been discontinued due to the increased availability of imported corn.
In MY2019/20, Poland produced 8% more grains than in the crisis in MY2018/19. Production of all grains, except corn, increased. The quality of grain varies greatly due to the summer drought. The reduced corn harvest may see stronger demand for other feed grains.
Total grain production in Portugal has been declining since 2013, driven by lower corn plantings, themselves falling due to lower margins compared to alternative crops, and to a lesser extent diversification established by the EU’s greening measure. Corn is Portugal’s most important grain crop, accounting for 75% of the country’s total grain production. The decline of domestic grain production, together with increased demand, has eroded Portugal’s grain self-sufficiency rate, which is currently estimated to be just over 15% (25% in the case of corn).
MY2019/20 saw both the wheat and barley crops considerably exceed previous expectations, the hot dry summer weather and intermittent showers proving to be positive despite some concerns at the time. Brexit has led to export uncertainty and disrupted sales. With consumption in line with previous forecasts, except industrial use of wheat which is now forecast to rise, the main consequence of the increased production is currently forecast to be increased ending stocks of both grains. These will weigh on the MY2020/21 balances.
Planting conditions in the Baltic countries have been very favourable for grains thus far. Warm weather and sufficient soil moisture meant a good start for plantings.
This article is based on the USDA’s GAIN report, EU28 Crop Update.