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French farmers face more losses this year if grain price slump continues
August 29, 2017 / 12:32 PM / in 3 months

French farmers face more losses this year if grain price slump continues

PARIS, Aug 29 (Reuters) - Following several lean years, French wheat growers could be plunged further into the red in the 2017-18 season if prices continue to slide, their industry association warned on Tuesday.

Although the wheat harvest in the European Union’s largest grain producer this year ended up around normal levels, at 36.8 million tonnes, some parts of France saw their crop ravaged by a combination of dry autumn weather, late spring frosts and a hot spell in June, wheat growers group AGPB told reporters.

In addition, world prices have fallen sharply since the start of the season on July 1 - with the benchmark on Euronext futures hitting a new contract low on Tuesday - pressured by hefty global supplies and a surge in the euro.

AGPB forecasts French grain growers’ average income in 2017/2018 will total 2,000 euros ($2,411) for the season but warned that if prices continued to wane, which it said looked likely, it could fall to between 0 and minus 10,000 euros.

This comes after several difficult years, the worst being in 2016/2017 when they recorded an average loss in income of 20,000 euros per grain farmer as volumes harvested collapsed more than 30 percent at a time of already low prices.

“We are very worried. We were hoping of a rebound in prices for farmers to recover but for some it’s far from being the case; they will have neither the volume nor the price,” AGPB Chairman Philippe Pinta said.

Harvest results were noticeably mixed this year with some farms producing excellent wheat yields while others, sometimes nearby, recorded their worst ever, he said.

Soft wheat amounts to more than half of France’s total grain output.

AGPB said prices paid to farmers were currently at around 130 euros per tonne of wheat - 20 percent below the average of the past 10 years - against production costs of 190 euros. This meant a net loss of 30 euros per tonne after taking into account EU subsidies of about 30 euros.

Last season wheat prices paid to farmers had fallen to an average of 120 euros per tonne due to additional quality problems, Pinta said.

He confirmed that in terms of quality, this year’s wheat crop in France looked “exceptional”, mainly due to high protein levels.

“This should allow us to reconquer some markets lost in 2016,” Pinta said. “The problem is not to sell, it’s the price.” ($1 = 0.8293 euros) (Reporting by Sybille de La Hamaide; Editing by Susan Fenton)

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