PARIS, FRANCE — France, the European Union’s largest wheat producer and exporter, in recent years has faced a series of difficult harvests and a drop in exports. So far this year, it has experienced significant dryness in late winter and early spring.
Additional precipitation is needed to ensure winter crops achieve full potential and to allow adequate planting, germination and growing conditions for corn, the US Department of Agriculture (USDA) said in a report from the Foreign Agricultural Service (FAS). The nation is again concerned that the 2023-24 crop will face a drought similar to those seen in 2022-23 and 2020-21.
In 2020-21, France’s wheat crop dropped to 29.2 million tonnes, the third smallest in history and only slightly above the 2016 crop, which was the most extreme yield lost in recent years. The drop in 2020 was attributed to heavy rain in 2019 that prevented sowing winter wheat in the best conditions and reduced planted area by about 1 million acres. A mild winter led to pest infestations, which impacted the health of the crop and its development.
The winter was followed by a dry spring resulting in moisture stress and limiting grain filling, reducing its size and weight. Farmers reported that yields varied widely between fields, which are due to the soil capacity to hold moisture and the date of sowing.
This winter was also very dry with an unprecedented sequence of days without rain, according to French agency France-AgriMer. February was the fourth driest month since 1959 and the groundwater situation is “deteriorated and unsatisfactory,” it said.
“Despite temperatures remaining above the seasonal average and soil moisture becoming increasingly dry, grain production in France is expected to recover from the low levels registered in market year 2022-23,” the FAS said.
Crop production
France has a dominant position in agricultural production in the European Union. With a temperate climate in the north and a Mediterranean one in the south, the nation has a wide variety of crops and livestock. However, cereal and wine production continue to dominate the agricultural economy.
Wheat production in 2022-23 is estimated at 33.7 million tonnes, according to an April 13 grain market report from FranceAgriMer, down 5% from the previous market year.
The mainland French territory has 56% arable land, although that has been declining steadily since 1950 due to urbanization. Of the 500,000 farms in France, 93% are middle range to large-scale in size.
Wheat production in 2022-23 is estimated at 33.7 million tonnes, according to an April 13 grain market report from FranceAgriMer, down 5% from the previous market year. Exports are estimated at 16.9 million tonnes, virtually unchanged from the previous year.
Durum production is estimated at 1.34 million tonnes, down 16% from last year, while exports are expected to reach 955,000 tonnes, a drop of 12%.
In initial estimates for the spring planting, the French Ministry of Agriculture estimated soft wheat area will be 4.77 million hectares, an increase of 1.7% year-over-year and stable compared to the five-year average. The estimated planting area of winter soft wheat is 4.75 million hectares.
Barley production in 2022-23 is estimated at 11.4 million tonnes, down 1% from the previous market year. Exports are estimated at 1.38 million tonnes, down 2% from the previous year. China has become a major destination for French barley, increasing from 10% of exports in 2018-19 to 26% in 2021-22.
Spring barley planted area for 2023-24 is estimated at 488,000 hectares, a decrease of 14.2% year-over-year, the agriculture ministry said. Total planted area for all barley is estimated to reach 1.82 million hectares, a decrease of 2.1%.
The 2022-23 maize crop is estimated at 9.95 million tonnes, a drop of 31% from the previous year. Exports are estimated to drop 37% to 3.5 million tonnes. The agriculture ministry will release its preliminary planting predictions for maize in May.
Domestic production of soybeans is limited, estimated at 407,000 tonnes in 2023, according to COCERAL. France depends on imported soybean products for animal feed in the livestock and poultry sectors. There is a strong demand for protein to meet basic requirements of compound feed formulations.
“French importers decide where to source soybean products primarily based on price, and, to a lesser extent, on protein content,” the FAS said.
France is the largest producer of rapeseed in the EU, with totals estimated at 4.4 million tonnes in 2023. The agriculture ministry estimated total rapeseed area in 2023-24 to increase 9.3% to 1.34 million hectares.
Milling sector
France is the second largest flour producer in Europe, after Germany and ahead of Italy, and 10th largest in the world, according to the flour milling sector’s trade body, the Association Nationale de la Meunerie Française (ANMF). The nation has 387 mills that use 5 million tonnes of wheat to produce 3.9 million tonnes of flour per year.
In 2021, France exported 184,720 tonnes of flour, roughly 5% of production, mostly to Europe (80%), followed by Asia (9%), Africa (4%) and the near and Middle East (3.6%).
In 2021, France exported 184,720 tonnes of flour, roughly 5% of production, mostly to Europe (80%), followed by Asia (9%), Africa (4%) and the near and Middle East (3.6%). Imports of flour are also relatively small at 243,400 tonnes in 2021, with 96% coming from the EU, especially Germany (67%) and Belgium (12%).
Mills range in size from more than 150,000 tonnes to less than 5,000 tonnes of capacity, with 264 in the less than 5,000-tonne category.
In the domestic market, French flour mainly is used by artisanal bakeries, industrial bakeries, supermarket bakeries and companies that produce biscuits, biscotti and others, accounting for 90% of flour use. Another 6% is household flour and the rest is for other uses.
The milling sector saw normal activity resume in 2021, with production back to pre-COVID levels and sales up nearly 3%, ANMF said. But during 2022 and into 2023, the industry has faced historic increases in the price of wheat and electricity, it said. Association President Jean-François Loiseau said in June 2022 that the compression of margins had “reached its limit.”
Further contractions in milling companies’ margins are expected this year, and the ANMF is concerned about the postponement of investments and new recourse to loans, the association said in its January newsletter. Despite high grain and energy prices, inflation in the price of bread is half that of inflation for food products. The Consumer Price Index increased 12% in October and November 2022 while bread only increased 6% in the same time period.
“This situation illustrates the difficulty for millers’ customers to take into account the multiplication of increases in charges observed since the beginning of 2022, unlike in other food sectors,” ANMF said.
Government support in light of highly volatile electricity prices is not fully compensating millers for the increase in costs, it said. Spot electricity prices have been very volatile since September 2021, reaching record levels.
Not all companies are eligible for aid, and access depends on the status of the company and whether it meets criteria of “energy-intensity.” The amount of aid varies according to the tariffs subscribed by the mills before the energy crisis, ANMF said.
“This disparity in treatment between companies disrupts competition between operators,” ANMF said.
Wheat prices are staying at historically high levels as well, ANMF said. The average price of spot soft wheat fluctuated between €300 and €360 per tonne between July and December 2022, before falling at the beginning of this year to the peak seen in November 2021.
“The rise in wheat prices, which began in mid-2021, was not immediately reflected in the evolution of flour price indices, which only increased in early 2022,” ANMF said. “Since July, flour price indices have stagnated, while costs, other than wheat, have increased. The current drop in soft wheat prices will partially relieve the pressure exerted by the cost of wheat for mills that were not fully hedged before December.”
