Wet French harvest causes quality issues

As torrential rain continues to batter many parts of Europe this summer, winter and spring crop conditions in France, the European Union’s biggest grain exporter, are tumbling rapidly. The word catastrophic has been rolled out in the past week to describe this year’s harvest, with crop ratings at an eight-year low and farmers potentially facing the worst production outlook in at least 10 years.

Last week’s crop update from FranceAgriMer rated the French soft wheat crop at just 50 percent good-to-excellent. This is inferior to conditions at the same point in 2020, another harvest dogged by heavy rain, and the worst since 2016, when France reaped its smallest wheat crop since the 1980s. While the rating was unchanged from a week earlier, it is down from 78pc at the same time last year.

As of 29 July, the durum wheat crop was rated 58pc good-to-excellent, compared to 67pc a year earlier. At the beginning of last week, the winter and spring barley crops were rated 53pc and 66pc good-to-excellent, respectively, down from 80pc and 73pc at the same time in 2023.

This spring was the nation’s fourth wettest on record, according to Meteo France, with rainfall registrations 45pc higher than the 10-year average. Sunshine recordings throughout the spring were also around 20pc lower than the seasonal average, delaying crop development and crucial field activities. Landslides and flooding caused severe damage in many farming areas, and a continuation of the unseasonably wet conditions into the summer months has caused regular and prolonged harvest delays.

As of 29 July, FranceAgriMer was calling the soft wheat harvest 67pc completed, a big jump from only 41pc a week earlier but well behind the 86pc recorded on 31 July 2023, and the five-year average of 84pc. The durum wheat harvest was 8pc completed at the start of last week, against 67pc on July 22 and 100pc a year earlier. The winter and spring barley harvests were 99 and 54pc realised on 29 July, respectively, compared to 94 and 31pc a week earlier and 100 and 94pc in the same week in 2023.

According to French farmer lobby group, the General Association of Wheat Producers in France (AGPB), field surveys suggest at least a 15pc drop in wheat output is on the cards, compared to 2023, but it could be as much as 28pc as quality issues increase. That could put this year’s harvest at 26 million tonnes (Mt), which would be the lowest in more than a decade.

Agricultural consulting agency Stratégie Grains is calling the soft wheat crop a tad higher at 26.7Mt. Popular French website Moisson Live, which translates in English as Harvest Live and compiles harvest results from farmers across the country, is projecting a soft wheat crop of 26.4Mt based on regional data and samples submitted up to 30 July.

Grain quality is now the biggest concern, with reports of poor protein and extremely low test weights quite prolific since harvest commenced. After the 2016 harvest disaster, when yield forecasting systems failed to anticipate the most extreme yield loss in over half a century, France introduced new crop forecasting regimes and revised its wheat quality standards, including a minimum test weight of 76 kilograms per hectolitre (kg/hl) for milling wheat.

Soufflet Agriculture said test weights in the 74-75kg/hl range had been quite common this year. This would not only decrease total output and the proportion of milling wheat but could present issues for delivery against MATIF wheat futures, for which a minimum 76kg/hl test weight is required. The average protein content of test-weight-compliant wheat reportedly is running in the 11-11.5pc range, against the milling wheat futures specification of 11pc minimum. There are rumours that Lithuanian and Latvian milling wheat is being bought in to deliver against futures shorts as the French farmer is a very reluctant seller at the current price levels.

Assuming 65pc of the soft wheat harvest makes milling grade, which may be generous considering the emerging quality issues, that would be just 16.9Mt of milling wheat in France this year, compared to the recent low mark of 16.1Mt from the 2016 harvest. With this year’s harvest now past the peak, the trade is concluding that wheat exports will not be as robust in 2024/25 compared to recent years.

With a potential aggregated loss of income exceeding €1.6 billion, French farmers are calling on the government to provide financial aid to mitigate the financial pain. The grain growers are seeking compensation, tax relief and deferral of loan repayments. They are also calling for the release of the European Union crisis reserve funding.

Last Monday French Agriculture Minister Marc Fesneau visited a farm in central France announcing exceptional measures to support cash flow that could be mobilised at the national and European level. He also referred to possibility of action by banks and insurance companies. Although the minister mentioned the possibility of commencing talks with Brussels to mobilise the EU agricultural reserve, formerly known as the crisis reserve, no decision yet has been made. The mechanism was first triggered in 2023, following Russia’s invasion of Ukraine, to help Eastern European countries protect their farmers and economies against increased imports of cereals and oilseeds.

The French harvest is being heavily scrutinised by the global trade and the MATIF shorts, with milling wheat availability potentially at its lowest level this century. Exporters are scrambling, and 2024/25 shipped volumes are already lagging last season and the five-year average. Farmers in many areas are searching for domestic feed homes due to quality downgrades. French milling wheat may already be trading at a significant premium to Russian-origin wheat, but the managed-money short positions on MATIF appear excessive in a shrinking crop environment.

Tags: Production, wheat, crop, yield, durum, soft wheat, harvest, winter barley, grain, spring barley, France, Outlook, European Union