Corn production in the United States, Russian grain output and the drop in production out of the Ukraine – these are the three key issues that will impact on grain prices in the run-up to the 2023 harvest.
That is according to one Irish farmer who is currently living and working in Romania -Jim McCarthy – he grows 20,000ha of crops in northern Romania.
McCarthy shared his outlook for the year ahead in The Tillage Edge, the Teagasc podcast for tillage farmers.
“Current official estimates point to corn producers in the United States planting out some 90 million hectares of crop this year, with a projected yield value of 11.5t/ha.
“This level of output has never been achieved before. But if this performance target is not achieved, the impact on world grain markets will be measurable.
“There is also evidence to confirm that that sunflower output in Russia will be well down year-on-year,” he said.
But McCarthy also warned that there is little doubt that the current cold, wet weather currently impacting on Ukraine “will serve to reduce that country’s total grain output in 2023.”
He said: “Specifically, we could be looking at a 40% reduction in grain maize production, which competes with Irish feed wheat.”
But McCarthy also believes that the outlook for grain prices could improve as the year progresses and he stressed that there is a need for growers to sell some of their output forward.
He discussed on the podcast the reduced potential for high grain yields being achieved in 2023, particularly in Europe and highlighed how this is a weather-driven phenomenon.
But with regard to grain exports from Ukraine to neighbouring countries, for example, Ukraine and Poland, McCarthy said the issue simply boils boils down to the grain price.
“Farmers in Romania and Poland started bringing-in grain from Ukraine and filled their stores with it. Meanwhile, international prices started to slip, leaving these people with very expensive grain in store
“As a consequence, the respective authorities stepped in and stopped all cereal imports from Ukraine on the basis that it would allow farmers within their own territories to empty their stores prior to the 2023 harvest.
“Ukraine is not at fault within this scenario. However, many of the growers in Romania that have been impacted were the same people that bought fertiliser at €1,000/t last autumn.
“And, as a consequence, they are under severe financial pressure at the present time.”
According to McCarthy the end result of this could result in significant tracts of land In Romania coming on to the market in the short-term.