October 7, 2008

EU grain production to be up 19 percent from 2007 

In its latest report, Strategie Grains estimates grain production in the EU in 2008 at 305 million tonnes, up 19 percent from 2007.

Wheat production (excluding durum) is seen at 137.6 million tonnes (111.7 million tonnes in 2007), nearly 4 million tonnes greater than the estimation in August.

It also better than expected yields in many member states that have contributed to the increase and put further downward pressure on grain prices.

The EU-27 animal feed sector is expected to consume almost 150 million tonnes of grain in 2008/2009, up 8 percent from last season when uncompetitive wheat prices saw significant substitution for non-cereal products such as tapioca.

Wheat sees the biggest recovery with consumption by the animal feed sector at 59 million tonnes, up 23 percent from last season.

The increased availability of feed wheat and consequent fall in price means less soy meal is being used to substitute wheat. This, together with falling crude oil prices and reasonable crops in the Americas, is putting pressure on soy meal prices.