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Cereal production falls but EU remains in surplus
18/07/2005 - While cereal production in the EU will be 10 per cent below last year's record harvests, food processors will not have to look to imports to make up their requirements.

Giampiero Genovese, head of the EU's agricultural forecasting service, Mars Stat, told FoodProductionDaily.com that any regional deficits in cereals will be met from surpluses produced in other areas and from the previous growing season.

"The EU will be able to compensate for internal local deficits," he said. He added that due to harvesting time for some crops, some processors, such as pasta makers, might have to resort to imports.

"However this is a normal situation," Genovese said.

In general, western areas of the EU will be in deficit while central and eastern Europe will have normal to optimal surpluses, he said.

On Friday Mars Stat published a report forecasting that this year's cereal production will be at least 28m tonnes below last years' record numbers, but the total EU cereal harvest remains in line with the average of the last five years. The reduction is being caused by drought in some areas of Europe.

"The geographic extension could spread and crop yield impact worsen if the drought continues," the European Commission cautioned in publishing the Mars Stat report.

The agency forecast wheat output would fall by about 10m tonnes, with yields down by 5.8 per cent to 5.6 tonnes per hectacre (t/ha). Durum wheat yields are expected to drop dramatically, by around 24 per cent, mainly in Spain and Portugal. The agency projects soft wheat yields to fall by 5.2 per cent.

Last week, the EU's statistics agency Eurostat has forecast cereal output at 259.3m tonnes and wheat at 116.7m tonnes.

Spain and Portugal had suffered the worst drought in at least the previous 30 years in terms of the water balance deficit on arable land, the Commission said. Parts of France, the largest producer of EU cereals, are under the poorest growing conditions since the drought of 1976, considered as one of the worst agricultural years in Europe.

Meanwhile Mars Stat forecasts barley yields will fall by 10.5 per cent to 6.5m tonnes. Maize production is forecast to fall by six per cent to 7.9m tonnes.

Rice yields are expected to be 19 per cent lower, compared to the average of the last five years. Other crops are also affected or potentially affected by the scarcity of rain and water reserves. The rape seed yield is expected to fall by three per cent, sunflower by two per cent and potatoes by three per cent.

For livestock producers, the lack of moisture coupled with high temperatures has affected pastures and grasslands in the south-western portions of the continent. The affected areas (19.700.000 ha) represent about 48 per cent of the total pasture area.

The worst conditions are observed in Spain and Portugal, which together have about 12.5 per cent of the total pasture area in the EU. In France, south–central Italy and Greece, which together account for another 36 per cent of the total, the impact of the drought is is not considered serious. In the other member states, the situation is normal. In some areas of central and central-eastern Europe, pastures are experiencing a very favourable season, Mars Stat said.

The 2005 drought has some similarities with the one in 1976, which is considered one of the worst agricultural years for Europe. Both years suffered from the dry conditions since the beginning, but in 1976 the deficit of rain prevailing during the spring season was much more pronounced than the one experienced this year, Mars Stat said.
MGR Archive 19.7.2005
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Region Type Price  
Russia Rapan $ 700
USA Jupiter Rice $630
USA Calrose #1 $830
USA Calrose #1 Paddy $480
EU Prices Baldo €660
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