A rain-delayed German harvest has prompted Toepfer to forecast a 13% slide in the country's grain crop, and spurred US officials to cut by 10m tonnes their forecast for overall European Union production.

Analysts at German-based Toepfer said that grain output in the EU's second-ranked producer looked set to come in at the bottom of the 44m-45m tonne range forecast last month, after a wet harvest compounded damage from an early summer heatwave.

While the wheat crop was set to come in around the middle of the 23m-24m range previously forecast, considerable quantities of milling wheat were in danger of being downgraded.

"The rainfall in August is not only harming progress with the harvest, but also grain quality," Toepfer said, noting that 15-20% of the crop had been harvested in the eastern grain region of Mecklenburg Western-Pomerania.

'Wet and stormy'

The comments were echoed in a report from US Department of Agriculture bureaux across the EU, which warned that "in Germany, more than half the wheat is still in the fields in mid-August, and the persistent rains are increasing the risk for sprout damage".

However, the report's deepest concerns were saved for crops further east, which had suffered "wet and stormy weather" over the last two months, "disrupting the harvesting of the grain crop and significantly reducing yields and quality".

Countries affected included Poland, the EU's third-ranked grain producer, Bulgaria and Romania, while in Hungary "standing water has reduced both the harvested area and yield of grain┘ as well as the quality".

Of the bureaux's 10m-tonne downgrade to their forecast for the EU's total grain crop, wheat accounted for 7m tonnes.

At 135.5m tonnes, the wheat harvest was pegged 2m tonnes short of the official USDA forecast for Europe, which was revised two weeks ago.

Intervention release?

The bureaux added that livestock farmers looked vulnerable to paying higher feed prices, thanks to the region's weaker production prospects, as well as the surge in international grain markets.

EU feed grain consumption would again fall in 2010-11 as reduced quantities of "price competitive" wheat outweighed even the prospect of the European Commission permitting a "significant volume" its barley stores to be sold.

Higher prices are also expected "to see an increase in the inclusion of alternative sources of energy such as distiller's grains with solubles", a byproduct of bioethanol plants.

The EU has some 5m tonnes of barley in store, bought largely last year through an intervention programme designed to support grain prices, but which has now been withdrawn from the grain.



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