May 29, 2007

EU grain output seen to increase this year

The UN Food and Agriculture Organization (FAO) have predicted an additional 2 percent of acreage planted for grains will have European farmers harvest 4 percent more or 282.0 million tonnes this year.

The Rome, Italy-based agency however cautioned in its May outlook that current dry and warm conditions on a large area of Northern and Central Europe will hold further forecasts as some good rains are immediately needed in these areas.

The US Department of Agriculture forecast holds similar concern, stating "unseasonably dry weather in Northern Europe" could slash expected production.

The US forecast, recently released by USDA's Foreign Agriculture Service (FAS), said farmers in the EU's 27 member nations will harvest 134.9 million tonnes of wheat, 55.6 million metric tonnes of barley and 55.3 million tonnes of corn in 2007/2008.

The FAS report said consumption should increase for wheat and remain stable for barley and corn as the proportion of feed use for wheat should decline in favour of food and non-food commodities. The report also said third country imports should decline as wheat exports are expected to increase a little, and exports of corn should rise significantly.

Ending stocks are forecasted to increase, said FAS.

Of the grain available within the EU in the coming crop year, Europe's feed industry is expected to consume about 161 million metric tonnes, roughly the same as this year, FAS estimated. Around 57 million tonnes of this will be in the form of feed wheat, 38 million tonnes of barley, 43.3 million tonnes of corn, 3.4 million tonnes of rye, 750,000 metric tonnes of sorghum, 5.9 million tonnes of oats and 12.9 million tonnes of mixed grains.