Europe's crops in good condition entering spring, says Origin Enterprises

Origin Enterprises flagged the good condition of winter crops in many major European growing areas as it reported narrowing losses for the first half of its financial year, and a “solid foundation” for its more important second half.
The Irish-based group, owner of the Agrii agronomy chain, said that in the UK winter crops “are generally well-established ahead of the spring growing season”, despite the late start to the autumn sowings window from wet and cold weather and a late-running 2017 harvest.
“Good sowing and growing conditions in October and November enabled significant catch up in drilling activity,” Origin Enterprises said.
It estimated overall UK sowings of combinable crops for the 2018 harvest at 4.5m hectares, in line with last year’s area, although weighted a little more to winter-sown options, for which area was “marginally above last year at 2.8m hectares”.
A benchmark survey by the Andersons Centre published two weeks ago showed UK crop area, excluding fallow land, of 4.46m hectares for the 2018 harvest, up 27,000 hectares year on year, showing rapeseed gaining area among winter-seeded crops, although with wheat and winter barley losing some ground.
‘Well established’
For Romania, Origin Enterprises also reported area figures - at 8.4m hectares overall, including 3.2m hectares of winter crops – in line with year-before data, with seedlings seen as having got off to a promising start.
“The cropping area is well established and in generally good condition, notwithstanding some localised challenges encountered by unseasonally dry weather at the planting stage.”
And for Ukraine, the group also said that winter crops were “generally well established and in good condition”, on an area, at 7.8m hectares, in line with that a year before, with the prospect of some increase in spring sowings.
Overall area for Ukraine’s 2018 harvest was pegged at 22.7m hectares, a rise of some 300,000 hectares year on year.
Growing market focus
For Poland, Origin Enterprises did see some drop in winter crop sowings, by 2.9% to 4.6m hectare, after “above-average rainfall in many growing regions of northern Poland delayed the completion of the harvest and curtailed new crop planting activity”.
Nonetheless, “this shortfall is expected to be recovered through an increase in spring plantings leaving the total cropping area for the growing year broadly equivalent to last year at 8.1m hectares”, said the group, although failing to update on the condition of the crop.
The comments come amid an increasing investor focus on European winter crops as they emerge from winter dormancy, with a particular interest given last week’s so-called “Beast from the East” cold snap, which is seen as having posed a threat at least to crops in some areas of Germany and Poland.
‘Best condition in four years’
Separately on Thursday, analysis group Agritel flagged the growing importance of Romania as a wheat exporter, after a period when “the regular increase of yields improved by favourable climatic conditions has enabled the country to raise its output over 9m tonnes for the first time in 2017”.
“The country is now a key player on the European grain market as third exporter inside the European Union.”
Meanwhile, in Ukraine, UkrAgroConsult earlier this week raised its forecast for Ukraine’s 2018 wheat crop by some 1.2m tonnes to 26.3m tonnes, citing a raised area estimate, and strong crop ratings.
“Ukrainian winter cereals are in the best condition in four years,” UkrAgroConsult said.
“Since the winter of 2017-18 was quite mild in terms of both temperature and precipitation, loss rates in winter cereals are likely to be low.
"In particular, we expect that, at most, 1% of winter wheat will be lost."
‘Solid start’
Origin Enterprises’ comments came as the group unveiled a halving to E31m in losses for the August-to-January period, the first half of its financial year, on revenues up 7.4% at E586.9m.
Underlying operating profits rose 12.6% to E2.26m, “mainly attributable to the benefit of higher agronomy service revenue and crop input volumes, together with improved margins”.
The performance had provide a “good foundation”, for the second half of the group’s financial year, a far more important earner, Origin Enterprises added.
Stockbroker Davy said that the results showed a “solid start” by Origin Enterprises to its financial year, seeing potential for the company’s performance in the key spring sowing and fertilizer application window.
“A good cropping base and UK wheat price trading in a healthy pricing corridor provide a solid platform ahead of the key application period, March,” Davy said.
Origin Enterprises shares stood 0.9% higher at E5.85 in morning deals in Dublin.

Readers choice: TOP-5 articles of the month by UkrAgroConsult