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German Pigs Will Get Fat On Wheat As Downpours Spoil Harvest

Published on Aug 4 2017 12:15 PM in Supply Chain tagged: Wheat / Germany / Agriculture

German Pigs Will Get Fat On Wheat As Downpours Spoil Harvest

Pigs and cows in Germany may be feasting more on wheat this year as heavy rains threaten the harvest for the European Union’s second-biggest producer.

Germany is a major grower of high-protein wheat that’s essential for the country’s traditional flavors of darker, heavier bread. But this year, weeks of rain before the harvest mean that more of the crop will be less suitable for bakers and used only as livestock feed.

"The wheat quality so far is worse than last year and worse compared to 2015," said Bernhard Chilla, an analyst at Agravis Raiffeisen AG, one of the country’s top grain collectors.

As much as 40% of all German wheat will be used for animal fodder this year, double the usual level, according to estimates from Agravis and researcher Agriculture Market Information Co.

German farmers, like their European counterparts, have been dealing with all kinds of weather this year. First came prolonged dryness during winter in many areas, then cool conditions in spring and a heat wave in June. In July, rains hit the country and have continued into this month.

The mix of growing conditions means crop yields are likely to be diverse, according to BayWa AG. Hot and dry weather in June led to smaller-than-normal wheat kernels, curbing the test weight and increasing protein content, according to Agravis’s Chilla. Wet weather in the past days is another reason for quality concerns, he said.

Animal Feed

Feed wheat typically has a lower weight and lower falling number, meaning the bread doesn’t rise well during baking. The protein content in livestock feed is also less than levels for wheat used for flour milling.

"We will see much more feed grains and less top qualities," said Wienke von Schenck, an analyst at Bonn-based AMI. "Last year, it was tight with the feed wheat supply, so maybe this year, we may be oversupplied. The rest may be going to southern Europe."

Rains are likely to persist for another two weeks, AgResource said in a report. The downpours had the worst impact in central Germany, one of the country’s most important wheat areas, according to Agravis. Unstable, rainy weather has slowed grain harvests and farmers are in a “difficult” situation, Agravis’s Alfred Reisewitz said in a statement Friday.

So far, test weights are the biggest problem, while the protein content is in line with the long-term average, according to Chilla. The wet weather increased the risk of mycotoxin, causing some wheat to fall over in the fields, raising concerns about sprouting. The falling numbers in some cases are significantly down, Agravis said.

A lot depends on northern Germany, where rains have interrupted the harvest. So far only 5% of wheat has been collected and most of the region hasn’t started cutting, according to Ceravis AG, a local collector of the grain.

"It’s quite difficult these days," Frank Deckert, a senior trader at Ceravis, said in a telephone interview from Rendsburg, Germany. "We’ve got rain all the time. One day without, one day with. It’s quite hard to get combines on the field. Therefore, there is no real improvement in the harvest progress."

There are still fields in the north where wheat is not ripe yet, meaning the crop might be spared from the damage, Deckert said. If the north has a good harvest, production could be higher than last year, Chilla estimates.

Weather in the next two weeks will also determine how much can be exported, according to von Schenck. Shipments may drop by as much as 15% from the previous season in the worst-case scenario and unchanged in best case, she said.

 News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.
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