- "Disappointment Squared" over the 2024 Crop Prospects
Excessive rainfall has resulted in a considerably poorer crop yield for farmers this summer. The anticipated harvest is estimated to be 39.3 million tonnes, a decrease from 42 million tonnes in 2023, as indicated by the German Farmers' Association. This is described as a rather dismal assessment. Farmers are also grappling with lower prices despite increased expenses. The association emphasized that agricultural products are not the primary causes of supermarket prices. The sector cautioned against making it more difficult to attain yields due to new regulations regarding the use of plant protection and fertilizer products.
Joachim Rukwied, the president of the German Farmers' Association, stated in Berlin, "Unfortunately, we were only able to achieve an average crop." As before, it was a nerve-wracking experience that concluded in great sadness. In numerous regions, there were substantial drops in both quantity and grain quality. Initially, there was excessively wet weather from autumn to early summer, followed by a scarcity of sunshine. Lastly, rain and thunderstorms repeatedly prompted harvesting combines to take forced breaks. The 2024 harvest once again highlights the evident effects of climate change, according to Rukwied.
Extreme shortage in wheat
Particularly affected was winter wheat, the primary grain crop in this region. Due to unfavorable weather at planting, the cultivated area decreased by 330,000 hectares. The association now anticipates a yield of 18 million tonnes, a decrease from approximately 21 million tonnes the previous year. Winter barley yields are predicted to drop slightly to 8.9 million tonnes, and rapeseed to 3.7 million tonnes. This pattern of decline has been ongoing for several years.
"Farmers are doubly disappointed with the 2024 harvest," explained Rukwied. In addition to the poor performance, the prices farmers are currently receiving for their grain are under even more pressure. Currently, wheat prices are around 200 euros per tonne, down by 10 to 15 percent from the previous year's level and far from the 2022 peak of 350 euros. "This is rather puzzling," said the president of the farmers' association. Regardless, yields were also lower in France and Spain, and global supplies are tight. The indicators should suggest price stabilization.
Food currently serves as a brake on inflation
For now, the period of sharp price increases for food in supermarkets has come to a halt. In July, food was 1.3 percent more expensive than the previous year, but this was below the overall inflation rate of 2.3 percent. Rukwied highlighted that the share of agricultural raw materials in the final price - depending on the degree of product processing - has been decreasing for years. However, it is also clear that: "Farmers require significantly higher producer prices in the short term and in the long term to produce economically."
Negative impact on businesses
The combination of low yield and low price is now impacting farmers negatively, as Rukwied indicated. Furthermore, operating costs, such as energy, remain high. As a result, economically viable grain production in Germany is scarcely possible. The association also views restrictions and regulations on the use of plant protection products and fertilizers as a critical factor. Politics must quickly change course, warned Rukwied. If not, there is a risk that more feed wheat will be produced instead of high-quality bread wheat.
A challenging year for many fruit farmers as well. Due to frost in the spring, a significantly smaller apple harvest is expected, though the outlook is better in Southern Germany than in the North. Strawberry cultivation was also not enjoyable this time, as excessive moisture hindered a full harvest. However, sugar beets, corn, potatoes, and vegetables harvested in the fall benefited from the rain - although potatoes suffered from rot. Rukwied remains optimistic that there will be a good vintage in 2024 for wine.
The European Union, being a significant market for agricultural products, may be affected by the lower wheat yield in Germany due to the poor harvest conditions. The excessive rainfall and unfavorable weather have reduced the winter wheat yield to 18 million tonnes, a significant decrease from the previous year's 21 million tonnes.
The European Union's food industries and businesses that rely on imported German agricultural products could potentially face supply shortages or increased costs, given the decrease in production and the subsequent pressure on grain prices.
