The decline of the corn and sunflower harvest was caused by the drought and heat that affected the agriculture this summer.
The corn and sunflower production is worth EUR2.1 billion, 18% lower than in 2011, according to ZF estimates.
The lower decline in value than in volume was because of the surge in prices over the last few months, due to the negative production forecasts.
“The production data we work with are slightly lower. I think one of the factors that led to the increase in prices for the main agricultural raw materials this year is the farmers’ reluctance to sell. The lower harvest contributed to the price increase, too,” explains Robert Arsene, general manager of trader Agricover, the fourth leading such business on the local market with EUR218 million in revenue last year. “Now is adjustment time for the market and domestic quotes are being adjusted slightly downwards. The future price trend, however, depends on the international commodities exchanges.”
European Commission data show that Romania, a market without any real protection against drought, saw a cumulated grain production decline of almost 40% this year. This is also the most serious decline in agricultural production in the entire European Union.
Under the circumstances, Romania lost its second place among the largest corn producers in the EU to Italy, which harvested 10.2 million tons, 10% more than in 2011.
Still, it remained second largest sunflower producer, behind France.
The farmers that bet on corn collected EUR670 million less this year, considering the total value of the corn harvest was down 30% to EUR1.5 billion, according to ZF’s calculations based on average prices on the local market.
The corn production went down by almost 40% in volume to 7 million tons, as a result of the lower yield caused by the drought.
Both losses in revenue and volume vary from farmer to farmer, as the results depend on the strategy each of them uses.
Those who this spring rushed to sign contracts to sell their production right after harvesting lost most money.
“We got half of last year’s corn crop. We finished harvesting one month sooner than normal because the summer heat caused plants to ripen as if in a microwave oven,” said Gheorghe Lamureanu, manager of Agroterra Import Export of Constanta (SE Romania). The company farms 1,200 hectares of land and posted EUR1.1 million revenue last year.
“We sold the entire production because we had contracts signed beforehand. We sold the corn for EUR200/ton, because we did not breach the contract signed,” Lamureanu added.
Official Agriculture Ministry data show the corn price to have reached 1020 lei (EUR226) per ton in mid September, 40% higher than in the same time of 2011.
Although the corn price has risen since the beginning of the summer, farmer Gheorghe Lamureanu did not benefit from it because he sold his harvest in advance.
On the other hand, the farmers who bet on sunflower will end the year with higher revenues, because the production decline in volume was offset the increase in prices.
Farmers harvested 1.3 million tons of sunflower this fall, 27% below last year’s level. The price, however, has gone up fast. Whereas sunflower was trading for an average of about EUR350/ton last year, it is now trading for some 40% more.
“The volume decline of the sunflower production was fully offset by the price increase. However, many of the small farmers, who farm most of the arable land, lost money on sunflower because their low yields do not cover costs,” said Constantin Iancu, who farms 2,000 hectares of land in Dolj County (southern Romania) via Centro Trans Corporation, which posted EUR3.1 million revenue last year.
The average sunflower yield stood at 1.1 tons/hectare this year, almost 40% lower than in 2011. In all, farmers planted sunflower on 1.1 million hectares of land in the spring.
(English version by Loredana Fratila-Cristescu)