Last week, the USDA's Economic Research Service (ERS) released a report titled, "Characteristics and Trends of U.S. Soybean Production Practices, Costs, and Returns Since 2002." Today's update includes highlights from…
Drought and Hot Temperatures Negatively Impact European Union Grain Production
In its monthly World Agricultural Production report Friday, the USDA’s Foreign Agricultural Service (FAS) indicated that, “European Union (EU) (MY) 2022/23 corn production is forecast at 60.0 million metric tons (mmt), down 12 percent from last month, 15 percent below last year’s crop, and 10 percent below the 5- year average. Area is estimated at 9.0 million hectares (mha), down 1 percent from last month and 3 percent from last year, but 3 percent above the 5-year average of 8.8 mha. Yield is estimated at 6.67 tons per hectare, down 11 percent from last month, 13 percent from last year, and 12 percent from the 5-year average.
Check out the current state of drought and its impact on agriculture in the EU👇— Janusz Wojciechowski (@jwojc) August 12, 2022
➡️47% of 🇪🇺 is under drought warning conditions, 17% in alert. Drought and hot temperatures have been especially recorded in central and north-western 🇮🇹, 🇪🇸, 🇵🇹, 🇷🇴 and southern 🇫🇷. /1 pic.twitter.com/pca58opOwP
You can find more details on the drought here👇— Janusz Wojciechowski (@jwojc) August 12, 2022
JRC @EU_ScienceHub drought monitoring:
➡️JRC drought report July 2022: https://t.co/4Rl58cmaCW
➡️next JRC report on drought will be published on 22 August. /6
“Searing heat and widespread drought during pollination and tasseling has significantly diminished the EU’s corn crop. The major producing areas in Europe are in the south – Spain, Southern France, Italy, and the Balkans – where conditions have been highly unfavorable. These areas have been under continuous pressure from drought and extreme heat, particularly during the vegetatively sensitive mid-season period.”
FAS pointed out that, “High temperatures during this period can lead to aborted kernels, while low precipitation and soil moisture results in small grain weight. Rainfall has been well below normal in these southern regions for several months. In western areas such as Spain and France, the corn crop is two to three weeks ahead of normal due to the heat. In areas of Italy, Spain, and France where corn is normally irrigated, there are water restrictions. Various measures of vegetation health show extensive deterioration in the corn regions.”
With respect to wheat, Friday’s FAS report noted that, “Wheat production for marketing year (MY) 2022/23 in the European Union (EU) is estimated at 132.1 million metric tons (mmt), down 1 percent from last month, 4 percent from last year, and marginally below the 5-year average.”
“The wheat harvest has finished in most EU countries. Harvest reports indicate drought and high temperatures have taken a toll on the wheat crop,” the report said.
Also on Friday, Bloomberg writer Megan Durisin reported that,
The drought withering Europe’s farms is set to drive prices for meat, milk and cheese even higher, adding to the pressures on consumers as everything else in the grocery aisle gets more expensive.
“Blistering summer heat is drying up grazing land and shrinking harvests of grain destined to feed animal herds. British cattle and sheep farmers are dipping into their winter forage reserves in the height of summer. Corn fields in France are in their worst shape in a decade and wilting elsewhere, exacerbating the coming shortfall in livestock feed.”
Durisin explained that, “The extreme weather compounds the difficulties already facing farmers in the European Union, the biggest pork and cheese exporter. Livestock producers are grappling with rising grain and energy costs, plus labor shortages and disease outbreaks. That shrunk herds and boosted EU meat prices in June by about 12% from a year earlier — the biggest jump ever.”
The Bloomberg article added that, “More European farmers are razing corn fields early for silage as yield prospects worsen. They also may mix more wheat into livestock rations since that grain was collected before the brunt of the drought and is trading at a rare discount to corn.”
Meanwhile, Reuters writers Pavel Polityuk and Daren Butler reported today that, “The ship Brave Commander has left the Ukrainian port of Pivdennyi, carrying the first cargo of humanitarian food aid bound for Africa from Ukraine since Russia’s invasion, Refinitiv Eikon data showed on Tuesday.”
The Reuters article noted that, “Ukraine can export 3 million tonnes of grain from its ports in September and be able in the future to export 4 million tonnes a month, said Deputy Infrastructure Minister Yuriy Vaskov.
“He said that Ukraine had received applications for 30 ships to come to Ukraine in the next two weeks to export grain while the total export volume so far was about 600,000 tonnes.”
Polityuk and Butler added that, “Despite the unblocking of ports, Ukraine’s grain exports are down 46% year on year at 2.65 million tonnes so far in the 2022/23 season, the agriculture ministry said this week.
“Ukraine exported 948,000 tonnes of grain in the first half of August, down from 1.88 million tonnes in the same period a year earlier.”
Also today, Financial Times writer Emiko Terazono reported that, “The first grain-carrying ship to depart from Ukraine since the Russian invasion appears to have docked in the Syrian port of Tartus after it stopped transmitting its location signal early on Friday, according to satellite photographs.”
“Since setting sail at the start of this month, the ship’s destination has been the subject of much speculation. The 26,500 tonne cargo failed to reach its originally stated destination of Lebanon after the buyer rejected it on quality grounds,” the FT article said.