Now that the European grain harvest is well under way, it is becoming increasingly clear that the yields can be called disappointing. In France, arable farmers are even asking for crisis support now that yields, quality and price are disappointing. The harvest size is also being adjusted downwards in Germany.
There is a real chance that French arable farmers will actually receive financial support. On Monday, July 28, Agriculture Minister Marc Fesneau visited an arable farm and announced during his visit that he would come up with measures to support farmers' cash flow. Both at national and European level.
Double whammy
That is exactly what the advocacy group L'Association générale des producteurs de blé (AGPB) is aiming for. If Fesneau has his way, the European crisis reserve will be used for this. French grain growers in particular are dealing with a 'double whammy'. Last fall sowing was difficult and this spring it was wet and dark for a long time. In addition, the prices - although above the ten-year average - are not great and certainly not sufficient to compensate for the lower yields. It is precisely the French wheat that buyers are ignoring. This is because there is an abundance of Russian wheat, which is also of better quality.
Their German colleagues, represented by the Deutscher Bauernverband (DBV), are not doing much better. The advocacy group has further scaled down the total grain harvest to 41 million tons in its second harvest forecast. That is one million tons less than was estimated in mid-July. According to DBV figures, a third of all wheat has been harvested and half of the rapeseed. Showers continue to put a halt to the harvest and stable, dry weather is necessary.
Low hectoliter weight
This news probably sounds familiar to Dutch arable farmers. Here too, the returns are simply disappointing. Growers who reach nine tons have done well. What is also striking are the relatively low hectoliter weights, which roughly fluctuate between 70 and 73. There are also negative outliers - up to 55 - but also batches approaching 80.
The warm summer weather at the end of July ensured that the harvest went smoothly in all parts of the country and was harvested with low moisture levels. In the south of the Netherlands, thunderstorms and rain showers throw a spanner in the works, while in the southwest more than half has already been harvested. This also applies to the clay areas in the center and north. It can be concluded that the winter wheat sown late, in December or sometimes even January and early February, is performing better this year than the early plots. Racial differences are also clearly visible.
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Regional wheat prices have fallen slightly this week, following the lead of the futures market. Feeding wheat is paid between €197,50 (Emmeloord) and €205 (Goes) per tonne. A week earlier, all regional stock exchanges were still trading at €200 or more. Barley is also paid slightly less. There the price range is €182,50 (Goes) to €185 (Middenmeer). A small part of the summer barley has been harvested, but it is mainly the plots sown later that still need to be left for a while. The spring wheat is also very variable this year, due to a large spread in sowing dates and weather conditions. Intuitively, the yields here may be better than wheat.
The situation on the international market has not changed much compared to earlier this week. However, the negative reports about the European grain harvest do influence the market. The September contract on the Matif closed on the last day of July at a level of €220,25 per tonne. That's €5 more than Monday's close. A price level around €215 is seen as a bottom under current conditions.