Europe: 2005/06 Corn Production Down in the EU, Up in the Balkans

              
Summary
USDA's December estimate for 2005/06 corn production in the European Union (EU) totals 46.9 million tons, down 6.4 million from last year.  Although area was down 450,000 hectares from last season, the major factor affecting this year's crop was a severe but rather localized drought. The drought drastically lowered yields in two of the largest corn producing countries - France (the EU's largest) and Spain (typically ranked fourth).  Meanwhile, abundant summer rain fell in Hungary, helping the EU's third largest corn producer to harvest another bumper crop, and slightly counteracting the large yield declines recorded in the Iberian Peninsula area. 

Drought Reduces Corn in France, Spain, and Portugal
EU corn production fell during 2005/06 as a result of the extremely limited growing season precipitation in southwest Europe.  Various sources have stated that this year's drought was the most severe to strike Spain, Portugal, and southwest France in fifty years. The drought's effects were manifested in a 1.3-million-ton year-to-year drop in Spain's corn production to 3.5 million tons.  Moreover, France's annual production dropped 3.2 million tons, to 13.2 million in 2005/06. In the last ten years, output was lower only in the 2003/04 season, known for the thousands of heat-related deaths in Paris.  Portugal also suffered a large reduction in its corn crop. Its entire area was consumed by drought, and while not a large grain producer, its production dropped nearly 50 percent to 400,000 tons. 

Record Crop in Hungary
As a result of a favorably wet summer, Hungary's 2005/06 corn crop is estimated at a record 8.7 million tons, up 0.5 million from last year and up 2.0 million from the five-year average.  According to the Ministry of Agriculture and Rural Development, only about 80 percent of the corn crop was harvested by late November, when the crop is typically completely cut.  Because the already expensive costs associated with mechanical drying were further increased by the season’s fuel price hikes, farmers were more likely to delay harvest, preferring to let the corn dry-down in the field.  

An additional issue compounding Hungary's agricultural decisions this year is its shortage of storage following two consecutive years of bumper crops. The situation in Hungary is made worse because it doesn't have direct access to a seaport, therefore transportation expenditures and export delays have increased.  Hungary has been working with the EU government in Brussels for solutions to its increased intervention offers, its limited storage facilities, and its added logistical expenses.  On a more positive note, many new storage facilities are being built which will greatly expand capacity.  While some will be finished as early as January, all are expected to be completed by May, just before the cutting of the 2006/07 winter grain and rapeseed crop.

The top five EU corn producers in 2005/06 are France, Italy, Hungary, Germany, and Spain, respectively. Because of the drought, Spain, which is typically in fourth place, flipped positions with Germany during the 2005/06 season.

Summer Rain Boosts Production in Southeast Europe

Much of Europe's corn is grown in the Balkan countries because of their warm and humid summers.  The USDA estimates 2005/06 corn production in the non-EU Balkan countries (see chart below) at 20.1 million tons.  This season, corn production in the Balkans benefited from abundant summer and early fall precipitation.  Mild autumn weather allowed for a prolonged corn harvest, which had begun later than normal.  Corn moisture was very high after the unusually wet summer, but the warm fall aided the drying-down of the crop, which remained in the field up to a month longer than usual.   

The biggest corn producer in the Balkans is Romania, with its 2005/06 corn production estimated at a bumper 9.0 million tons. In neighboring Serbia and Montenegro (the region's second largest producer) the corn crop is estimated at an above-average 6.3 million tons.  Total 2005/06 corn production in the Balkans is estimated to be well above average, although excessive fall precipitation delayed the corn harvest in Romania, Bulgaria, Serbia, Croatia and Bosnia/Herzegovina.  A listing of Southeast Europe's 2005/06 corn production by country, shows that the two biggest corn producing nations of Romania and Serbia/Montenegro comprise about two-thirds of the Balkan corn crop.