April 19, 2012

 

German wheat hopes for production rise this year

 

 

When farm cooperatives ditched hopes of a rise in production this year, hopes for the German wheat harvests received a second blow in two days, citing "sometimes considerable" damage from winterkill.

 

Germany's Deutsche Raiffeisenverband (DRV) farm co-operatives group cut its forecast for domestic wheat harvest, the EU's second biggest, by 2.7 million tonnes to 21.5 million tonnes.

 

The downgrade took the forecast below the 22.7 million tonnes which Germany harvested last year, when its crops were damaged by a dry spring and harvest rains. And it was the latest in a series of downbeat statement over Europe's harvest prospects.

 

On Tuesday, the Deutschen Bauernverbandes (DBV) German farmers' association said that 660,000 hectares of winter grains had been damaged by February's cold snap, with the "prevailing drought" presenting farmers with "additional worries".

 

And in Spain, which has been at the centre of drought concerns, farm officials warned of a 25% slump, to 12.7 million tonnes, in winter grains production. Last week, Strategie Grains cut its forecast for the EU soft wheat crop by 4.3 million tonnes, including a 1.3 million-tonne cut to the estimate for Germany.

 

The DRV said that barley, rapeseed and wheat crops "suffered more from the extreme period of frost in the first half of February than had been previously thought.

 

"A large number of fields have had to be ploughed up which only in March presented no cause for concern."

 

The group also cut its forecast for the winter barley harvest by one million tonnes to 6.8 million tonnes and for rapeseed output by 500,000 tonnes to 4.3 million tonnes. Nonetheless, the DRV acknowledged some "welcome relief in some regions" from rains which have refreshed many parts of Western Europe where a lack of moisture so far in 2012 has set back crops. Indeed, some commentators have raised questions over the degree of gloom over Europe's harvests.

 

Jaime Nolan-Miralles at FCStone's Dublin office said: "Our contacts on the ground across some of Europe's key producers are in many cases failing to see the supportive evidence for such estimates".

 

Following the recent rains, "the coming three-to-four weeks will offer far more clarity on European soft wheat acreage and any potential impact of dryness on yields".

 

Grains traders at a major European commodities house noted that some "lost production may be recovered if the more showery weather continues in Western Europe".

 

The DBV said that winterkill had meant German farmers reseeding up to 70% of their winter grains, at "considerable cost". Indeed, the association urged seed groups to focus on developing seed "better adapted to extreme weather conditions".

 

"Farmers work under great financial risk, as harvest success is only partly dependent on management decisions and on high levels of inputs."