July 20, 2005

European Union: Mid-Summer Update
2005/06 European Union Grain Outlook   

Spain's drought-reduced wheat crop drops further; Soil moisture levels rising, 
benefiting summer crops in France; Precipitation falls-off in Poland, raising concerns.

USDA's July estimate of  the 2005/06 European Union (EU) wheat crop is 127.8 million tons, up 1.1 million tons from last month, but  6.5 percent  below last year’s record crop. Harvested area is estimated at 22.8 million hectares, down 2 percent from last season and unchanged from last month.  Yield is forecast at 5.62 tons/ha, 5 percent above the five-year average, but below last year’s record 5.88 tons/ha. Last year's yield was a result of nearly ideal weather in almost every country in the EU.  For the second straight year, the overall EU wheat crop is expected to be quite large, but it will remain significantly below last year’s record harvest.  A combination of weather-related factors are in-play this season, with some areas benefiting and others struggling, but the estimated aggregate 2005/06 wheat production remains high.

Drought in Spain and Portugal
With the exception of their north, both Spain and Portugal have a Mediterranean climate. Their normal rainy season begins during fall and lasts through the winter, with summer precipitation being a rarity. This annual precipitation scheme builds moisture reserves during the autumn and winter that aid the developing winter grain crop.  Reservoirs are also recharged during these rainy months. This water later supplies the irrigated summer crops of corn, rice, and cotton.

This year's storm track failed to provide the essential precipitation to southwest Europe, triggering the on-going drought and its devastating effects on agriculture.   In addition, hot, above-average summer temperatures have exacerbated moisture loss. The non-irrigated winter wheat and barley crops have sustained large losses.   Specifically, the durum producing areas of Andalucia, and elsewhere in the south of Spain, have had the highest temperatures and lowest rainfall amounts.  Spain averages about 6.2 million tons of wheat, but this year's drought-reduced crop is estimated at just 3.7 million tons.  Portugal's wheat harvest is always substantially smaller than its much larger neighbor, Spain, but it has also been severely affected this season - perhaps even more so.  Portugal's wheat production is estimated at just over 100,000 tons this year, far below its 250,000 ton average.  

The EU is the world's single largest wheat producer and therefore has the ability to buffer regional harvest problems.  While the loss of the 2005/06 crop on the Iberian Peninsula is a disaster in Spain and Portugal, the EU's aggregate wheat harvest is only marginally affected.  Although Spain is one of the larger European countries in terms of area,  it averages just 5 percent of  total EU wheat crop. This year's Spanish crop will comprise about three percent of the EU total.  

Season Summary
In general, the EU wheat crop over-wintered well with minimal winterkill. Protective snowfall was present during the coldest periods, insulating dormant vegetation.  Much of northern Europe also experienced a very dry winter. Dryness concerns triggered water rationing measures in some areas.  Spring arrived late, delaying re-emergence and crop development by a couple weeks.  In addition, freeze damage was reported in Germany and Poland during an unusually cool April and May.  Timely relief arrived in the dry western countries of the United Kingdom (UK) and France during late spring, with copious amounts of rain greatly aiding wheat at the sensitive flowering stage of development. Temperatures rebounded during early summer, rising to above-average levels in June, quickening crop development in areas that had been lagging from a late start of season.  In addition, the excessive heat that had seared Spain crept northward into France during June, and may have stressed wheat during the grain fill stage, potentially lowering yields.   

The same dominant weather pattern that has brought welcomed precipitation to the UK and France, has saturated the Balkans with constant rainfall and has left areas of the EU's northeast dry during the month of June. Rainfall during the first ten days of July enhanced low moisture reserves in France and should help improve prospects for summer grains.  Northern Italy also received recent beneficial rainfall to the agriculturally important Po River Valley, which has had prolonged dryness. The recent precipitation has eased dryness concerns in northern Italy, and should help bolster water supplies for its irrigation demands.

Developing concerns in Poland, Hungary.

July precipitation will be key for determining wheat yield and quality, particularly in the eastern EU. For most of the season, crops in the north central countries of Germany, Poland, Hungary, and the Czech Republic have had good seasonal precipitation, consisting of alternating periods of rain and sunshine. However during June, Poland dried out and Hungary became soaked.  Hungary, on the northern edge of the storm system that has inundated the Balkan countries was drenched with heavy precipitation. This will likely delay the wheat harvest, expected to begin later this month.  

Dryness has been developing in northeast Poland and the neighboring Baltic countries of Estonia, Latvia, and Lithuania during early summer.  While these are not the biggest producing areas, there is concern that dryness will spread westward through all of Poland and much of Germany; areas that have seen limited rainfall in recent weeks. Currently yields are not expected to have been affected, but July rainfall is required to maintain the estimated production levels. 

Summer Crops
Looking briefly at the summer crops, water rationing has likely reduced planted area. Corn yields however, should not be dramatically reduced because Spanish corn is an irrigated crop and reservoirs remain near 50% of normal capacity.  The other large summer crop, sunflower, is typically planted on dryland, and thereby  it is highly influenced by heat and drought. Although sunflower plants are well known for their tolerance to dryness, this year's crop has had to endure extreme conditions.  With the heat already in place and further precipitation unlikely, the 2005/06 yield potential is low for the sunseed crop. 

EU Wheat Production Summary

Maps and Graphs

Gainers and Losers:    
July Gains    July Loser
2005 vs. 2004 wheat production

Seasonal Precipitation and Soil Moisture:

Vegetation Index:    
Higher vegetation index typically corresponds to high plant yields:   Vegetation Index Map

Vegetation Index Charts:

Temperature Maps:
June Temperature Anomalies:
Map 1          Map 2

Temperature Graphs:
Cold Spring Temperatures in Germany and Poland
High Maximum Summer Temperatures in Spain and Portugal

Additional Information:
Previous Europe Update

Weather data for Europe and other world agricultural regions can be accessed at PECAD's user-friendly Crop Explorer website, located at: http://www.pecad.fas.usda.gov/cropexplorer/

For more information, contact Bryan Purcell
with the Production Estimates and Crop Assessment Division, at (202) 690-0138