Bad harvest? “There will be companies that have a very good financial year”

The high prices for grain as a result of the Ukraine war are having an effect: German farmers have grown significantly more summer grain than in the previous year. They only had to sow these varieties from March, i.e. shortly after the start of the war.

According to data presented by the farmers' association on Tuesday, the German grain harvest totaled a good 43 million tons, two percent more than in the previous year. Based on data from the Federal Statistical Office, this is around one percent above the average for the past five years.

Farmers' president Joachim Rukwied nevertheless spoke of a “harvest below average again”. However, he was referring to an unusual seven-year comparison period calculated by the association from the quite strong harvest of 2014 to 2021 - without taking into account the weak year 2018. This makes the comparison period appear stronger than the usual five-year average.

Despite the very strong inflation in foodstuffs, Rukwied warned of continued high or even rising prices. "We need stable prices in order to be able to continue doing business at all," he claimed, referring to rising logistics costs and minimum wages. He also demanded that fertilizer factories and processors such as dairies should be given priority in the event of gas shortages.

Rukwied also painted the situation in muted colors in other respects. He didn't want to commit himself to the extent to which farmers' profits increased as a result of high agricultural prices. That depends heavily on the individual case - in particular on the point in time at which the farms fixed the prices for their expected harvest and at which they bought fertilizer. “There will be companies that have a very good financial year. Some, on the other hand, will be deep in the red,” said Rukwied. He could say more at the end of the year.

The state-owned Thünen Institute determined in the summer that farmers who mainly grow wheat and rapeseed can probably double their profits before labor costs. WELT AM SONNTAG reported at the beginning of June that this gross yield for the coming harvest is conservatively estimated at 1000 euros per hectare.

The reason for this is the high world market prices for grain. The price of wheat, for example, doubled to over 400 euros per ton after the start of the war. However, prices are currently falling again because the harvest in Ukraine is doing better than feared and thanks to an agreement, grain can once again leave the country by ship. Nevertheless, the price of just under 320 euros is still well above the pre-war level.

Rukwied pointed out that the crop yields varied greatly from region to region. For example, the harvest was very good near the Alps, while persistent drought depressed yields in central Germany and in Saxony-Anhalt. However, the overall statistics only show a clear drop in yield per hectare for maize.

According to analysts, however, prices on the world market are likely to fall - but only to a limited extent due to the ongoing uncertainties. According to official figures, Ukraine expects a harvest of at least 50 million tons of grain. Although this is significantly less than the record harvest of 86 million tons in 2021, it is much more than initially feared. The Russian harvest is also doing well - despite the lack of spare parts for some agricultural machinery.

This positive news contrasts with a severe drought in China. The country could therefore demand more agricultural commodities on the world market in the coming months.

For farmers, the high prices are obviously an effective incentive to plant more wheat - especially since the crop yield of the alternative corn has fallen significantly due to the drought. In addition, bioenergy is to be promoted less in the future. Therefore, the wheat harvest could increase further in the coming year.

According to data from Tuesday, the amount of spring wheat in particular has increased significantly this year: at 282,000 tons, it is 80 percent higher than the previous year's value - and also well above the average of the past five years. Farmers also harvested a third more spring barley than in 2021 – a good two million tons. In the case of oats, which are also not sown until spring, the harvest was roughly at the previous year's level, but significantly above the average of previous years.

However, the majority of the grain harvested in Germany is made up of winter varieties: they are sown in late autumn, but the harvest takes place in late summer, as is the case with summer varieties. The advantage of winter varieties over summer varieties is a higher yield. At 21.9 million tons, the harvest was four percent higher than in the previous year.

The market observers of the specialist service AMI also point out that the quality of the wheat is particularly good due to the drought this year, so the grain contains a lot of protein.

Even Rukwied saw a ray of hope: the 2022 vintage promises to be "awarded" thanks to the sun. The farm functionary knows his stuff: he grows vines on a small part of his own land in Baden-Württemberg.

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