Europe
July 17, 2023

In the space of two months, forecasts for harvests which were initially positive have been turned on their head by poor weather conditions across Europe.  The overall EU production for oilseeds and protein crops despite dramatic situations in Spain and Italy remain correct. However, for cereals the situation is extremely worrying with an expected production of 256 million tonnes, possibly the worst harvest since 2007 and 10% below the last 5-year average. Many farmers will not be able to cover their production costs, this is why Copa and Cogeca are launching an urgent call to action to face this difficult situation in 2023 and its consequences for 2024. 

During the beginning of May it was made clear already that some Member States, such as Spain, Portugal, or Northern Italy would suffer severe losses (up to 50%). However, at the time Copa and Cogeca’s forecasts were still estimating that the EU’s overall production would remain stable thanks to an improvement of weather conditions in Northern and Eastern Europe. Unfortunately, since then the situation has dramatically deteriorated. 

Droughts have hit again across all the EU in May and June, with no precipitations at all in some regions. We are now expecting a serious reduction of the production, especially for cereals, not only in Spain, Portugal, or Italy (up to -60% compared to 2022), but all over the EU (e.g., Romania -20%, Finland -30%, Poland - 14%, Lithuania -35% compared to the May forecast). These low cereal production numbers will be accompanied by a serious issue of quality in many regions. Although for oilseeds and protein crops the expected production remains decent (32 million tonnes for oilseeds, 3.8 for protein crops), the weather impact on the quality could seriously reduce profitability.

European farmers face a double whammy as this low production is combined with very high input prices and low future prices for all crops. In addition to the high energy prices and the ongoing general inflation, it is crucial to note that fertilisers used for the 2023 harvest were bought when prices were at the highest in 2022. With current very low future prices for cereals (219euros/t of milling wheat) and oilseeds (407euros/t for rapeseed) this creates a situation that is simply untenable for most farmers as shown for France and Sweden.

Against this background, Copa and Cogeca call upon the Commission for flexibility in the implementation of the CAP this year to not put at stake farmers’ access to basic support. Furthermore, we call for derogations for next year, due to the impact of these climatic conditions on the next agricultural year. In the same way, the prolongation of the suspension of import duties on ammonia and urea and its extension to other mineral fertilisers (as well as suspension on antidumping measures on UAN) would help farmers cope with a very difficult situation where they are being squeezed from all sides.
 

Website: http://www.copa-cogeca.be

Published: July 20, 2023