Small sigh of relief in the countryside. Since March, fears have been gradually mounting over the harvest, as the drought has spread in France. Farmers feared yields that were too low to meet demand, especially foreign demand. Thursday Jean-François Loiseau, president of Intercéreales, put an end to this anguish: “Even if we have experienced a new singular climatic year where periods of drought and excess water have alternated, the forecasts for the soft wheat harvest are reassuring for 2023.”
According to the estimate of the organization, associated with Arvalis, the national yield of soft wheat in France will thus reach 75 quintals – 7.5 tonnes – per hectare this year, “i.e. 5% more than the average of the last ten years” , at 72 quintals per hectare. “We are confident in our ability to meet the daily needs of French people and our international customers,” notes Jean-François Loiseau.
For barley, the harvest having been completed, the first increases are also positive. According to the Ministry of Agriculture, production amounted to 9.1 million tonnes, “the highest since the 2019 harvest”. With a yield above 68.3 quintals per hectare, up 4.4% compared to 2022 and 5.6% compared to the average of the last five years. Thanks to the sharp increase in surface area, the production of winter rapeseed is “estimated at 4.6 million tonnes, up 5.7% compared to the 2018-2022 average”, figured in mid-June the statistical services of the Ministry of Agriculture (Agreste). Attracted by rising prices since the start of the war in Ukraine, farmers planted more of this oilseed.
In detail, cereal growers in the North of France seem to have been a little more penalized by the lack of water in recent months. Conversely, the “intermediate zones”, from Charente to Lorraine, “had water on a regular basis”. Result, “the great particularity of this year” will be observed in these departments, “which will express yields much higher than previous years”, anticipates Jean-François Loiseau.
If France can boast of good results, such is not the case of its neighbors. According to the president of Intercéreales, “Italy has experienced a poor durum wheat harvest” with poor grain quality, in particular due to numerous floods. In Spain, the drought affected the soft wheat and barley harvests, which are mainly used to supply livestock. Before the outbreak of the Russian offensive in Ukraine, these two countries were mainly supplied with cereals in Ukraine and Russia. Just like Lebanon, Tunisia, Morocco or Algeria. For Jean-François Loiseau, “it is up to us, French, to win them back through supply, logistics and financial support”.
While prices have fallen since the surge in world markets caused by the war in Ukraine, they remain 30% higher than in 2019. “Between February 24, 2022 and August of last year, the price is risen to 400 euros per ton of soft wheat, before dropping for the past four months, ”observes Jean-François Loiseau. This is still insufficient to remove all concerns, while farmers saw their costs soar last year (transport, energy, etc.).
Because of this soaring cost, cereal areas are shrinking every year. Common wheat has thus lost 300,000 hectares in five years, out of a total of 4.8 million hectares in France. “There has been a lot of abandonment in the French intermediate regions, regrets Jean-François Loiseau. Some farmers have thus abandoned their land temporarily while others have focused on methanization (production of green gas, editor’s note)”.
But overall, the environment has remained buoyant for cereal producers for 18 months, after a decade of low prices. Some operators “pre-sold” part of their 2023 harvest when prices were higher. This will allow them to hope for an average price beyond the 230 euros at which the ton is currently traded on the reference market in Rouen. “This price level is currently insufficient to cover production costs around 250 euros per tonne, tempers Arthur Portier, within the firm specializing in agricultural risk management Agritel and himself a cereal producer in the Oise. Admittedly, producers have already sold part of their volumes at higher prices, but you never sell more than 30 to 40% of your harvest in advance. So the average selling price will be rather down compared to the exceptional year of 2022”. In fact, according to INSEE’s provisional agricultural accounts made public on Thursday, despite volumes down 11% last year, the surge in selling prices has enabled cereal production to climb more by 10% in value in 2022.
In the coming weeks, geopolitical tensions in the Black Sea, where the extension of the cereal corridor beyond July 17 is currently being negotiated, could continue to maintain a form of upward pressure on world prices.
Global agricultural and food production will continue to grow over the next decade at a slower pace, with growth of around 1.1% per year, predicts the OECD-FAO Agricultural Outlook report released on Thursday. Global food consumption, for its part, should increase by around 1.3% per year, point out the experts of the two international organizations.
In addition, warns the Secretary General of the OECD, Mathias Cormann, “the soaring prices of agricultural inputs for two years have revived concerns about global food security”. Every 10% increase in the price of fertilizer leads to a 2% increase in food costs. And this burden falls “heavier on the poor because they devote a larger share of their budget to food”, he explains.
In the coming years, yields should essentially be based on progress in plant breeding and the development of intensive agriculture. However, it is essential to invest more in infrastructure and technology, insist the OECD and the FAO.
