EU Wheat Production Reaches Lowest Level Since 2018 Amid Adverse Weather Conditions
Source: The DairyNews
European wheat production has taken a significant hit this season, with recent estimates indicating the smallest crop since 2018.
According to a market report from AHDB senior analyst Helen Plant, yields in major wheat-producing countries, including France and Germany, have been substantially lower than anticipated. This downturn is largely attributed to persistent rain during critical periods of crop development and harvest, exacerbating the already challenging agricultural conditions.
Private forecasters, the USDA’s Foreign Agricultural Service (FAS), and the governments of France and Germany have all revised their wheat production estimates downward, reflecting the difficulties faced by farmers across the EU. Stratégie Grains now projects soft wheat production (excluding durum) in the EU-27 at just 116.50 million tons, a reduction of 5.8 million tons from their previous forecast. This figure marks the smallest wheat crop since 2018, when production reached 114.8 million tons, according to the EU Commission. The report also raises concerns about the quality of the crop.
In France, the government has slashed its estimate for the country’s soft wheat crop by 3.3 million tons to 26.3 million tons, representing a 25% decrease from 2023 and the smallest crop since 1987. Argus Media offers an even more pessimistic outlook, estimating the crop at 25.2 million tons. Although the French wheat harvest has picked up pace recently, reaching 88% completion by August 5th, it remains eight days behind the average, according to FranceAgriMer.
Germany is experiencing similar challenges, with rain delaying the harvest and leading to reports of lower yields and protein content, albeit with significant regional variation. The German Statistics Office’s initial estimate for the 2024 wheat crop stands at 19.7 million tons, down from 21.5 million tons in 2023 and the lowest level since 2003.
The outlook for other crops is also bleak. Stratégie Grains’ latest estimate for the EU-27 barley crop is 50.6 million tons, which, while above the very small crop of 2023, falls below the five-year average. Maize production is also projected to decline, with both the FAS and Stratégie Grains placing output around 60 million tons, a reduction from last year despite an increase in planted area. This decrease is largely due to heatwaves in Eastern Europe.
Market Implications
The reduced EU crop numbers are providing some support to wheat prices, although the impact of upcoming international tenders could further influence market direction. The quality of the crop will be a crucial factor in determining milling and malting premiums.
However, the positive outlook for US maize production is tempering gains in feed grain prices. The US National Weather Service recently confirmed that average temperatures across the Corn Belt have been below the long-term average, a condition typically associated with yields near or above the long-term trend. The USDA currently forecasts the 2024 US maize yield just below this trend, with expectations for an upward revision in the upcoming World Agricultural Supply and Demand Estimates report.
The evolving global supply dynamics will continue to play a key role in shaping the agricultural markets in the months ahead.
Private forecasters, the USDA’s Foreign Agricultural Service (FAS), and the governments of France and Germany have all revised their wheat production estimates downward, reflecting the difficulties faced by farmers across the EU. Stratégie Grains now projects soft wheat production (excluding durum) in the EU-27 at just 116.50 million tons, a reduction of 5.8 million tons from their previous forecast. This figure marks the smallest wheat crop since 2018, when production reached 114.8 million tons, according to the EU Commission. The report also raises concerns about the quality of the crop.
In France, the government has slashed its estimate for the country’s soft wheat crop by 3.3 million tons to 26.3 million tons, representing a 25% decrease from 2023 and the smallest crop since 1987. Argus Media offers an even more pessimistic outlook, estimating the crop at 25.2 million tons. Although the French wheat harvest has picked up pace recently, reaching 88% completion by August 5th, it remains eight days behind the average, according to FranceAgriMer.
Germany is experiencing similar challenges, with rain delaying the harvest and leading to reports of lower yields and protein content, albeit with significant regional variation. The German Statistics Office’s initial estimate for the 2024 wheat crop stands at 19.7 million tons, down from 21.5 million tons in 2023 and the lowest level since 2003.
The outlook for other crops is also bleak. Stratégie Grains’ latest estimate for the EU-27 barley crop is 50.6 million tons, which, while above the very small crop of 2023, falls below the five-year average. Maize production is also projected to decline, with both the FAS and Stratégie Grains placing output around 60 million tons, a reduction from last year despite an increase in planted area. This decrease is largely due to heatwaves in Eastern Europe.
Market Implications
The reduced EU crop numbers are providing some support to wheat prices, although the impact of upcoming international tenders could further influence market direction. The quality of the crop will be a crucial factor in determining milling and malting premiums.
However, the positive outlook for US maize production is tempering gains in feed grain prices. The US National Weather Service recently confirmed that average temperatures across the Corn Belt have been below the long-term average, a condition typically associated with yields near or above the long-term trend. The USDA currently forecasts the 2024 US maize yield just below this trend, with expectations for an upward revision in the upcoming World Agricultural Supply and Demand Estimates report.
The evolving global supply dynamics will continue to play a key role in shaping the agricultural markets in the months ahead.
