EU Largest Corn Producer France Expects the Smallest Harvest in the Last 30 Years

According to the French Ministry of Agriculture, the corn harvest in France is estimated at 11.6M mt (including seeds) and 11.33M mt (excluding seed harvest), a 25% YoY drop and the lowest figure since 1990. Within the EU, France experienced the most significant reduction in corn production for CY 2022 due to the drought and high temperatures in July and August. In the past decade, corn has become the dominant feed grain over wheat in the EU and is supplied by both domestic production and imports. In 2022, the EU corn crop was affected by adverse weather conditions like severe drought and high temperatures, and the crop size is expected to decrease by 17% from the prior year. With less corn production, the EU is expected to import more. However, imports are forecast only marginally higher given tight global corn supplies, resulting in less corn feed use.

Seasonality of Cereals in France 

 Source: FAS IPAD

Due to the worst drought in decades, French farmers are in a difficult situation. According to experts, no region in France was spared from the drop in yield. Rainfall was minimal, while high temperatures dried plants, stymied kernel growth, and restricted irrigation water. The searing heat and crippling drought were constant, affecting pollination and grain fill in July and early August. The heat also accelerated plant maturity, and, in some cases, the crop was a month ahead of normal development. Crops planted in shallow soils were significantly impacted, while crops grown in deeper soils coped better with the low moisture conditions. Harvest started early in late August after a sweltering and dry summer that accelerated plant growth. French farmers have harvested 26% of this year's corn crop in W3 of September 22, compared with 14% the week before, according to the agricultural office FranceAgriMer. Lower corn production will affect livestock production, where some farmers use winter fodder reserves to feed their animals as pastures have dried up.

Top Export Destinations of Maize (Corn) From France

Source: Tridge

A smaller corn harvest will lead to higher food prices. Food costs in the EU already increased by 12% in July this year compared to the same month last year, and in the UK, the increase was even higher. Although France is not importing corn from Ukraine, other EU countries import corn from countries like Ukraine to cover their needs. In 2022, imports from Ukraine are expected to drop by about 50% compared to the previous season. Germany and Romania, other major European corn producers, were also affected by the drought. Additionally, producers are faced with increases in the costs of fertilizers and natural gas, which are used to dry corn after harvest.

According to EU Customs Surveillance data, market share and volume for Ukraine corn from July to September 22 were up 12% and 59% YoY, respectively, due to Ukrainian efforts to export corn via land before the opening of the Black Sea grain corridor. EU corn imports for 2022/23 are currently forecast at 19.0M mt to partially fill the domestic supply gap from lower production and a shift to wheat for feed use due to lower prices. Despite the start of the Grain corridor from Ukrainian ports, uncertainty prevails around the future of export prospects for Ukraine, a significant supplier of cereals to the EU. Prices in the following period will depend on the demand in the EU, resulting in increased grain exports from Ukraine. It is worth noting that the weather prevailing in France since the beginning of 2022 has taken its toll also on winter and spring crops, with yields below average which will additionally tighten stocks for the upcoming period.