With a few dates until the harvest of the cereal harvest in the Andalusian provinces ends, the negative perspectives due to adverse weather conditions are confirmed. The lack of rain in recent months has reduced yields by 20% over the previous season. The same situation is experienced in part of Castilla La Mancha, Extremadura and Aragon. The good forecasts in other large producing areas such as Castilla y León, Rioja or Navarra, are being affected by the lack of rain in recent weeks and, above all, by the current high temperatures.
In addition, there are thousands of hectares affected by hail, especially in Aragon and Castilla y León. In recent weeks, hail has affected some 125,000 hectares with damage of more than 30 million euros, of which about 100,000 correspond only to cereals, according to Agroseguro data.
Initial forecasts are being cut. However, production is expected to exceed the average of the last campaigns of 20 million tons, although far from the record figure of more than 26 million tons of the previous season. With a harvest in decline, prices have been upward due to increased demand in foreign markets.
In the EU and the United Kingdom, the warehouses integrated in Coceral estimate a cereal harvest of 315 million tonnes compared to 297 million the previous season. The International Grains Council and FAO estimate that record harvests will be achieved in wheat and corn, but they also forecast more demand.
Against these harvest forecasts, Spain maintains total cereal needs of between 35 and 36 million tons of which 4.5 are for human consumption, 2.7 for industrial use and another 26 are destined for animal feed, to the In addition, more than six million tons of soybeans are added. For this reason, the Spanish agri-food industry has to import some 7.5 million tons of corn and another three million tons of soft wheat. This places Spain as the first feed producing country for the demand for a powerful intensive cattle herd.
The increase in foreign and domestic demand has caused cereal prices to have maintained an upward line in recent months compared to the stability of recent years, reaching record prices in barley, soft wheat, corn and durum wheat. Something similar has happened in other raw materials for animal feed, such as soy, with increases of over 30%.
Altogether, the increases in the prices of cereals and other raw materials for animal feed have resulted in average increases in feed of more than 15%, which, for example, translates into an increase in the cost of beef production in milk, which is not collected in the contracts.