Maize output lowered in the EU

“While there is a hike in the numbers for both common wheat and barley, there has been a further reduction to maize output, with production for that crop pegged quite a bit lower year on year (YOY) at 57.4Mt for 2015-2016 compared to 7.9Mt for the previous year. However, the large EU maize stocks will compensate for the reduction in output,”​ Helen Plant, analyst at AHDB market intelligence, told us.

And she stressed that total cereal production in the EU this year is high so selection of grains for feed use “will come down to price​”.

The Commission put EU wheat production, excluding durum, at 149.2Mt for 2015-2016, up 4.6Mt in comparison to the previous estimates.  It said ending stocks were 17.6Mt, up 21% from the previous forecasts. 

For barley, the production estimate jumped to 60.9Mt, up almost 2Mt in comparison to last month. Ending stocks were increased marginally, with the increased supply being offset by higher domestic usage and exports, noted the UK based Agriculture and Horticulture Development Board (AHDB).

It also reported that with October’s balance sheet estimating a higher level of common wheat production, the EU export campaign is “going to have to step up in order to avoid stocks building.” ​

Exports have been slow in comparison to last season. 

Livestock production trends ​

Following publication of provisional UK livestock numbers from the UK’s Department for Environment Food and Rural Affairs (Defra) June Agricultural Surveys, AHDB has also updated its forecasts for cattle, sheep and pig supplies today.

The agency anticipates production rising next year, although it said finished cattle supplies are forecast to be tight at the start of 2016.

And it reported that with plentiful supplies of good quality forage available, feed demand from the UK ruminant sector may be limited, although low prices may encourage some supplementary feeding.

Pig prices have recorded a downward trend in 2015, with the average price hitting a seven-year low in recent weeks, said the agency. It noted that the weak euro against sterling has seen imported EU pig meat come in cheaper than domestic supplies, especially as the Russian import ban and increased production support low EU pig prices.

“Although pig prices at the moment are low, so is the cost of production, so there is little pressure on producers to reduce their herds. With higher UK pig meat supplies forecast, prices for 2016 are likely to remain under pressure unless demand picks up,”​ said the AHDB.

And the agency said despite the well-publicized difficulties in the dairy sector and the long-standing lack of profitability of beef production, the UK’s cattle herd increased in the year to June 2015.

This was the first rise in five years and included growth in both the dairy and beef breeding herds, reported the AHDB team. “The change of fortunes may be short-lived, however, as milk prices are still low and support payments are declining. With this in mind, it seems fairly unlikely there will be much future expansion in the breeding herd,” ​found the analysts.