Harvest 2023 is about to start

Very different expectations in the AGRAVIS areas of operation

The 2023 harvest will start soon. AGRAVIS expert Bernhard Chilla explains what impact the weather will have on the upcoming harvest. Our agricultural trade experts describe the current situation in individual regions of the AGRAVIS areas of operation. They also provide assessments of harvest expectations. This much in advance: The harvest will be affected by heterogeneous weather conditions, but there are no supply bottlenecks for the crop.

Bernhard Chilla, AGRAVIS expert for agricultural products

Outlook for the wheat supply situation in 2023/24 ahead of the harvest

As in the previous year, the wheat market faces major challenges for the upcoming season. In 2022/23, the grain year ended up being dominated by a sharp increase in exports from Russia and Australia. These were up sharply compared to 2021. This was due to an increase in wheat production of 26 million tons and 25 percent, respectively.

Despite sanctions, exports from Russia were much higher than expected in the market in June 2022. This should be kept in mind for the 2023/24 marketing year. If Russia has a high export potential, exports should be high with the beginning of the harvest. In the grain market, experts observed that since the beginning of 2023 the demand only picked up after a sharp slide in grain prices. German wheat exports only increased significantly after this price drop. This development clearly shows how price-elastic the world demand (and domestic demand) for agricultural commodities is. At the same time, the processing industry only covers short-term demand.

This applies not only to international demand, but also to the development of demand in Germany. This is likely to continue to accompany the grain market in the coming weeks. The supply situation is coming to the fore. It is important to note that only a significant deterioration in the supply situation compared with the previous year will have a lasting impact on the market situation.

The drought in Germany is likely to reduce harvest prospects compared with the previous year, according to initial estimates by Coceral or the German Raiffeisen Association DRV. Wheat production in Germany is expected to be around 0.5 to 0.8 million tons lower in 2023, according to experts. At the same time, a significant increase in French wheat production is expected, which will more than compensate for possible yield losses in Germany. Despite major local growth problems, EU wheat production in 2023/24 is expected to be higher than in the previous year. In the EU market, this supply expectation is only likely to change if wheat yields in the harvest do surprise negatively.

Russia still has plenty of wheat available for market supply. Surplus stocks from the 2022 crop are said to be enormous. Wheat production is expected to fall year-on-year, but remains higher than the 2017-2021 average. Russia's export potential is expected to fall, but a collapse in exports is not expected. Before the exporters can divide the market among themselves, the wheat must first be harvested.The weather in July, at harvest time, could still have a decisive impact on the quality and quantity of the 2023 crop - not only in Germany.

Harvest reports from the AGRAVIS areas of operation

Status: June 26, 2023

Barley, wheat, rye and triticale paint different picture
"We are looking at an assorted picture for the crops in East Frisia," explains Hilko Kroon, grain trader at AGRAVIS Ems-Jade GmbH. With regard to winter crops, barley is just maturing and grain filling is finished. "Here, the rain should have been sufficient for good yields," Kroon says. Wheat is in grain fill and would still need water to hold good HVAC weights. The first leaves are curling up. Rye and triticale are doing similarly.

Sowing conditions in summer tillage too wet and too dry
Regarding summer crops, farmers report that it was generally too wet at seeding time and too dry thereafter. "Thus, we have mediocre yield expectations for oats and beans, and spring barley is rather below average," Kroon says. In corn, mostly good stands are showing up on the Geest. On marshland, similar to spring barley, it is more problematic.

Fewer crops expected with storage space in short supply
"The grain harvest usually begins around mid-July in our area," describes the expert. If the drought continues, the stands will certainly mature a little faster. Early stands could also ripen a week earlier. "Looking at harvest volumes, we therefore tend to expect somewhat less than last year. One reason is also that the rapeseed acreage has been increased and these areas are primarily missing in wheat." However, there are also farmers in the East Frisian region who want to store through quantities from the previous harvest. "Thus, we are currently still assuming a shortage of storage space," says Kroon.

Whole crop silage due to prolonged drought

The long period of drought had a significant impact on agriculture in the AGRAVIS Ost working area, which covers Saxony-Anhalt, Saxony, Brandenburg and Thuringia. Crops in the north and east were severely affected from May onwards. The winter cereals were still standing very well before the rain failed to materialize in April. Barley and rye in particular suffered from the dry weather. Some farms had to react early and have already started to harvest parts of their crops for whole crop silage.

In the south, precipitation provided some relief
In the working area, however, farmers can breathe a little easier for the time being: "The precipitation of the past few days was very welcome. It was a blessing for the summer crops, but wheat also benefited to some extent," reports Wilhelm Winkelmann, Head of Agricultural Trade at AGRAVIS Ost. However, no one should have too high expectations. The rapeseed, for example, lacked the urgently needed water, especially in the grain filling phase, which is likely to further reduce the yield. "Currently, we are assuming a maximum average harvest. The rainfall also came too late for barley," says Winkelmann.

Crops got off to a difficult start
In southern Westphalia, the picture is varied. "On poorer sites, for example gravel areas or stony soil, wheat in particular is currently drawing strongly," reports Frederik Fischer-Neuhoff, Crop Production Manager from AGRAVIS Kornhaus Westfalen-Süd GmbH. Due to the wet spring, many farmers were only able to sow corn and summer crops late. Many crops had a difficult start and are therefore still showing restrained development. "We expect greater yield losses in summer cereals. Things look particularly bad for oats and spring barley," Fischer-Neuhoff predicts. In the case of corn, crow damage in some cases poses an additional difficulty, so that in many places areas are being replanted. Grassland is also suffering, albeit due to the recent dry weather conditions. For the second cut, the expert from Westphalia South expects a significantly smaller harvest.  

Expert expects 15 to 20 percent lower yields
But there is also good news: "The winter barley stands are looking good. Only minimal yield losses are to be expected here. The situation is similar with the earlier wheat varieties: here, the stands tend to look better," says the expert. Overall, farmers can expect yields to be around 15 to 20 percent lower than last year, according to the estimates. In 2022, however, the crop yielded about 10 percent more than a normal year.

Soils of the high-yield regions were able to store sufficient water
In the working area of AGRAVIS Niedersachsen-Süd GmbH, after a cold and wet spring, no significant precipitation fell since the beginning of the lap phase and the flowering of the rapeseed. "Thanks to the moderate temperatures, the water supply in the soil was still sufficient for the high-yield regions," explains Rainer Widdel, joint managing director of the company with Alexander Nergonewitsch. However, the situation north of the A2 is different. "On the light soils, the water retention capacity was too low and drought damage occurred," says Widdel.

Corn, beet and late wheat rejoiced in rainfall
Last week's rain brought regionally varying precipitation of 50 to 150 liters/sqm. This provided relief in the fields. Corn and beet in particular benefited from this. The late wheat on the clay and loess soils could also make good use of the water. In the sandy regions, however, the rain came too late.

Corn and spring barley suffer from drought damage
In large parts of eastern Westphalia and northern Hesse, there has been no rain for more than five weeks until recently. "The summer crops are suffering from the structural damage caused by a partially too wet sowing in spring, so that in the past two weeks the first dry damage appeared - especially on weak sites in maize and spring barley. The increasingly variable weather and the massive rainfall last week give us hope that the crops will recover," explains Stefan Bobbert, crop consultant at AGRAVIS Westfalen-Hessen GmbH.

Normal yields expected for winter barley and rapeseed
Looking ahead to the harvest, Stefan Pielsticker, Managing Director of AGRAVIS Westfalen-Hessen GmbH, sums up: "All early maturing winter crops, such as winter barley and rapeseed, will still achieve relatively normal yields with sufficient winter moisture." In the case of wheat, however, the weather of the past few weeks had left its mark, so that greater yield fluctuations per hectare were possible. "Overall, though, we expect a mostly average crop."