Potential in wheat…due to warm water in the Pacific


The impact of the dry weather is having a massive impact on supplies. Australia has been one of the hardest hit countries. After two drought years in a row, Dan explained the milling wheat price is now at $450/t.

The country is using its food-grade or milling wheat to maintain breeding stock and to feed its animals. Dan noted the country could be facing another year of drought.

This year saw Europe reach drought conditions like never before. EU wheat production last year was at 195 million tonnes; that’s the smallest since 2003.

    This year was very bad for wheat crops around the world.

“We had the warmest and driest Europe from May 1 to October 28. That dryness really centred on Germany, but expanded all the way into central Russia,” Dan added.

In general, the impact on cropping in Europe was negative and the dry weather extending into central Russia is causing concern for current wheat plantings, according to Dan.

“We’re concerned about the winter wheat crop. There’s a little bit of rain forecast 10-12 days from now, but it’s probably not going to be enough to reverse the dryness. That seed that went into the ground in late September had been lying there waiting for rain in order to develop.

“There’s probably a pattern change to some degree coming in November. We think it means a little more rain for portions of Russia and a little more dryness for western Europe, maybe including the UK and Ireland.”

El Nino

Irish farmers might want to familiarise themselves with the Spanish phrase ‘El Nino’. The irregular weather complex brings drought in Australasia and heavy rain in South America every few years.

That El Nino could impact on soybeans, corn and wheat crops in South America.

A build up of warm water in the Pacific ocean is a sign that an El Nino is on the way and Dan explained that the risks are growing for a strong El Nino in 2019.

“We’re probably seeing the strongest El Nino coming at us that we’ve seen in roughly 20 years. We’ve got this warm water that’s welling up with speed and abundance through the equatorial Pacific.

It’s shifting westward. We think we’re looking at a very strong El Nino in 2019. Something that will be monitored very carefully in countries like Australia and south-east Asia.

Land running out

“Last year, we planted a record 531 million hectares of farmland in the three principle crops of soybean, corn and wheat.

“This is up four million hectares in 2018. The market demands another seven-to-nine million hectares of wheat in 2019 to rebuild stocks.

“A lot of times we don’t build on that because the market doesn’t offer a lot of profitability; but in places like Latin America and Russia, lots of opportunities exist there.

“In terms of Brazil, people are making 20-30% of a return on farmland investments, so they continue to expand up into the Amazon at a rather rapid rate.”

Dan forecast that the world will reach its peak agricultural land-use between 2040 and 2060.


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