Europe wheat tour
NOTE - Ray Grabanski is writing this week's column from Western Europe, where he is traveling this week to discover in more detail the wheat and feed grain situation in Western Europe.
This week's story details wheat harvest progress in Holland, Germany, and Denmark as seen first hand by Ray and via interviews with EU-27 farmers and officials.
The market story in wheat in 2007 is centered in Western Europe, where some small production problems (almost too small to notice to European farmers and consumers) are magnified tremendously throughout the rest of the wheat producing/consuming world. This week, I make my first track back to Europe since 1991, as I first hand research the '2007 EU-27 Wheat Problem' and the reasons for the tremendous impact on the world wheat price in 2007. I note that feed grains is also getting some attention by USDA here, as feed grain production was also cut significantly (6.6 mmt to 138.17 mmt, mostly in corn) in the EU-27 in the August report (although I'm not sure I'd agree with that assessment by the look of the Dutch and German corn crop, which have received generous rains at critical times for corn - wheat harvest).
The most striking impression so far in this trip is the complete lackadaisical attitude of EU citizens and farmers about the wheat price explosion that is occurring across the world. In fact, most EU wheat producers are not aware of any impact at all! If you ask producers about their 2007 wheat crop, they say it's "About the same as always" which actually is true. They also are quick to point out that harvest is maybe 5 days behind normal, but they expect to be completed in just a few days. In Holland, virtually no wheat is left to harvest while Germany has just a few odd fields here and there (maybe 1-2% of production?) as of early this week.
Also, it's striking that in Germany, instead of any widespread wheat harvest problem, is the sheer number of corn acres relative to virtually any other crop. Corn acreage in both Holland and Germany appears to have expanded sharply since my last trip here (I saw virtually none in earlier trips), with my guess that corn acreage was larger than wheat acreage in the northern German highly productive areas. Percentage wise, I would guess that both Holland and Germany are approaching having more corn acreage than wheat acreage in production - a huge surprise to my eyes! This looks like a similar change to North Dakota, USA acreage mixes, where corn/soybeans have in the past 10-15 years increased substantially with improved adapted varieties, with subsequent cuts in barley/wheat acreage.
As you move north to Denmark, a larger and larger share of wheat harvest remains, with northern Denmark (with fairly intensive wheat acreage as a percentage of the total) for the most part less than 50% harvested. As you move further north into Denmark, the corn acreage percentage goes down (from perhaps 1 to 1 for wheat acres in the south) to about 4 to 1 favoring wheat acreage over corn in the north. Northern Denmark must be similar to ND, where the further north you go, the percentage of corn acreage drops (while southeastern ND is about 90% corn/soybeans and 5% wheat/barley, northeastern ND is about 60% wheat/barley, 20% soybeans, and virtually very little corn (but growing). Dannish farmers have combines in the ready position, however, with most waiting for damp grain to dry to continue the harvest. For the most part, the standing grain looks slighty stained but otherwise in mostly good condition.