EU cereals harvest down in 2012

Wheat, maize expected to remain focus in coming decade

The 2012 EU cereal harvest is expected to be about 3 percent lower than in 2011 with a usable production of 276.2 million metric tons, according to the European Commission’s latest report

The sharpest drop would be for maize, with the usable production declining by 15.5 percent to 57.5 million metric tons, due to much lower yields caused in particular by the drought in Romania, Hungary and Bulgaria. Also, common wheat usable production is estimated to decline compared to 2011 numbers by 2.4 percent to 125.6 million metric tons, mainly due to lower yields. 

On the other hand, barley usable production is expected to increase to 54.4 million metric tons. During the current marketing year, imports are expected to stay below 2011’s level, as those from the Black Sea area are considerably curbed. The expected decline of EU pork production, combined with expected high feed prices, is seen to reduce feed demand leading to a lower total domestic demand for cereals. Overall, the combination of a slightly lower crop production and stagnant demand is expected to keep the cereal balance tight, with stocks declining leading to a stock-to-use ratio of 12 percent.

The medium-term prospects for the EU cereals markets are characterized by relatively tight market conditions, low stocks and prices which are above the long-term averages, according to the Commission‘s report. The EU remains a net exporter of cereals but due to domestic demand growing faster than production this gap narrows. On the demand side, the most dynamic section is the demand for cereals as ethanol feedstock. The demand for food or feed use is stable throughout the baseline horizon. On the production side, a steady growth based on slightly increasing yields is expected. 

In terms of single cereals, the concentration on common wheat and maize is expected to continue during the coming decade. The smaller cereals and barley continue to lose their share. Regarding the use and the trade pattern, common wheat and maize are the best examples to describe the EU cereals market. In the case of common wheat the EU is a considerable net exporter and will remain so. The use of common wheat includes a strong food component.