The top three most produced grains in Europe are wheat, corn, and barley. According to Agrochart.com, the total EU grains production in the 2020/2021 season was 298.680 million metric tonnes. Wheat is the most grown cereal crop in the EU countries. In the 2020/2021 season it accounted for a market share of 45.7%, followed by corn at 22.1% and barley at 21.3%.
As a result of challenging weather conditions, the EU grains production in the 2020/2021 season experienced a -5.55% decline (17.563 million metric tonnes) compared to the 2019/2020 season. The COVID-19 pandemic also contributed to the decline in grains production resulting from the shortage of labor needed at the harvest time. Furthermore, the European Union grains exports are also poised to decrease in 2020/2021.
France, Germany, Poland, Spain, and Romania are considered the main grain producers in the European Union. In the 2020/2021 season their harvests collectively amounted to 59.9% of the total grain production. France, Germany, and Romania showed a decline in grain production for the season while Poland and Spain had an increase in production compared to the previous season. The EU countries that reported an increase in production in 2020/2021 attributed these gains to ample rains just before the crops began flowering. According to the European grain trade group COCERAL, with favorable weather conditions, the EU grain production is forecast to grow at a CAGR of 4% post (COVID-19) pandemic to 2024.
In the EU cereals are mainly used for animal feed (66%), and human consumption (33%), with small percentages, used in biofuel (3%) according to the European Commission data. Corn, oats, sorghum, and barley are mainly consumed as animal feeds, whereas wheat is equally used for human consumption and animal feed. The demand for grains for human consumption has experienced sustained growth in the EU despite the COVID-19 imposed lockdown measures. According to the European Commission’s Directorate-General for Agriculture and Rural Development (DG AGRI), it is expected that the overall demand for grains will see further growth in 2021/2022 due to less impact of the COVID-19 on the human consumption of EU grains.
In line with the increased consumption of cereals, the European Union reported that domestic consumption of wheat animal feed was 47.500 million metric tonnes.
At the same time the Food, Seed, and Industrial (FSI) domestic consumption was 70 million metric tonnes in 2020/2021 according to an AgroChart report. Statista forecasts the demand for wheat to grow at a CAGR of 7.7%, reaching 158.08 million metric tonnes by 2024. When we look at the European Union’s domestic consumption of corn, the animal feed was 65 million metric tonnes while human use was 22 million metric tonnes in the 2020/2021 season.
While the production of grain in the EU is faced by uncertainties concerning weather conditions and the potential effects of COVID-19, the cereal prices are not projected to face major upwards moves. Looking at the price trends, in June 2020, the price of soft wheat and maize in Europe were retailing at £186/T and £166.7/T respectively. Moving forward to June 2021, it is expected the retail price of wheat will be around £1208.7/T and that of maize at around £191.5/T.
The increase in grain exports in the next decade due to higher production in the EU countries will underscore the demand outlook and contribute to stable grain prices in Europe.