The European Union is currently facing a cereal production crisis, with factors such as adverse weather conditions, high production costs, low quality output, and stiff competition from Ukraine contributing to a significant decline in production levels. EU Commission official Pierre Bascou raised concerns about cereal output reaching only 255.6 million tonnes this year, which is 9% below the historical average. Droughts in Southeastern Europe and excessive autumn rainfall have negatively impacted both the quantity and quality of harvests, leading to a reduction in land allocated for cereals and falling yields in key regions such as France.
France, a major producer of cereals, has been particularly hard hit by the decline in production. Cédric Benoist, a French cereal farmer and chair of the cereals working party of EU’s farming association Copa-Cogeca, highlighted the challenges faced by farmers in France who are losing money due to the current situation. Maize production is estimated at 58 million tonnes, 12% below the historical average, while common wheat and barley production are also forecasted to be significantly below average. The issue of quality is also a major concern, with many harvests showing lower protein levels or contamination with alkaloids, impacting market value for farmers.
The cereal market has been experiencing volatile prices over the past two years, influenced by geopolitical factors and fluctuating supplies. Despite low EU production levels, global competitors in the Southern and Northern Hemispheres are seeing bumper harvests, leading to suppressed prices. Europe is also facing stiff competition from Ukraine, which is flooding the market with cheaper cereals, further driving down prices while production costs have increased. Fertilizer and animal feed prices fell by 8% in the third quarter of 2024, but overall input costs remain significantly higher than in 2020. Fertilizer prices are comparable to levels from the early 2020s, and production costs in key regions like France and Ireland have soared in recent years.
The decline in EU cereal production has set off alarm bells in the agricultural sector, with concerns raised over the sustainability of the current situation. The combination of adverse weather events, high production costs, low quality output, and stiff competition from Ukraine has created a perfect storm for cereal producers. COPA Cogeca has highlighted the impact of contamination on market value, with many cereal batches being downgraded from food to feed or biomass, resulting in lower prices for farmers. Despite the challenges faced by European cereal producers, there is optimism that the sector can overcome these obstacles with strategic planning and support from policymakers.
In response to the crisis, stakeholders in the EU agricultural sector are calling for action to address the decline in cereal production and support farmers facing financial difficulties. The EU Commission and MEPs are working to find solutions to stabilize the cereal market and ensure the sustainability of the sector. Measures such as financial support for farmers, research on innovative agricultural practices, and trade agreements to address competition from external producers are being considered to mitigate the impact of the current crisis. With coordinated efforts from policymakers, farmers, and industry stakeholders, the EU cereal production crisis can be addressed, ensuring a sustainable future for the agricultural sector in Europe.
