E.U. cereals harvest below five-year average

12.10.2016

Wheat harvest is fifth largest in 10 years while maize is suffering from unfavorable weather.
 
New estimates for the E.U. cereals harvest are 2.5% below the previous five-year average, according to the European Commission’s “Short-Term Outlook for E.U. arable crops, dairy and meat markets in 2016 and 2017” report.

According to the report, the latest estimates of the E.U. cereals harvest show a significant decrease compared to the prospects in summer. The overall usable production for 2016-17 is now estimated to reach 293.8 million tonnes, 16.2 million tonnes below the previous estimates. Total E.U. soft wheat harvest is expected 3.1% below the last five-year average of 134.2 million tonnes, the report said. This wheat harvest, although significantly lower than the two previous ones, is the fifth largest E.U. wheat harvest in the last 10 years. Climatic conditions have in particular affected the harvest in France, Belgium and the Netherlands, as well as in Greece, where production is expected to be 12% to 30% below the last five- year average, the report said. On the contrary, bumper wheat harvests are recorded in the Baltic States and southeastern Europe.

According to the report, E.U. maize production seems to have suffered from unfavorable weather conditions for the second year in a row. E.U. total production is expected to reach 59.7 million tonnes in 2016-17. There are still some downward risks due to possible conversion from grain maize to fodder maize in some areas and further drought/heat until harvest. This level is 11% below the last five-year average and equivalent to last year's bad harvest; the decrease is foreseen to be important in France and Germany (around -20%) and even more in Romania and Bulgaria (around -30%), the report said. On the contrary, the harvest forecast is good in Central Europe, particularly in Hungary (+23%) and Poland (+9%).

The report expects E.U. barley production to be similar to last year, with 59.6 million tonnes, 2% above the last five-year average. The increase in production is expected to be particularly high in Spain (+26%) and Romania (+28%), as well as in the U.K. and Germany, but lower than average in France.

Animal feed use might further increase slightly up to 174.8 million tonnes in 2016-17, the report said. Such increase is modest due to the developments in the animal sectors, and is likely to follow a switch from maize to wheat due to poor supply of maize and milling insufficient wheat quality declassified into feed wheat.

Looking back at the 2015-16 marketing year, E.U. cereals exports have been very good: E.U. barley exports hit record levels and E.U. exports of soft wheat remained close to their record 2014-15 level. In terms of net trade, though, higher than average maize imports explain the decrease of total E.U. cereals net exports by 6 million tonnes compared to the previous record year, at 30 million tonnes. Despite the weaker harvest in 2016-17, the rhythm of exports does not seem to have slowed down yet, the report said.

However, inevitably a decrease of E.U. cereals exports is expected in the coming marketing year, driven by supply lack of availability of soft wheat, lower quality for milling wheat and malting barley, as well as demand decreased barley imports from China and strong competition from other origins in soft wheat. According to the report, Russia will replace the E.U. as the largest wheat exporter in the world in 2016-17. E.U. imports of maize and quality milling soft wheat are also likely to increase in 2016-17.


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