“The decline is generated by weather conditions and the falling corn prices. Secondly, rapeseed is a commodity you can sell anytime, unlike corn,” says Chioreanu.
Corn and rapeseed are two of the farming products generating the biggest profit margins in the crop mix that also includes wheat, barley or sunflower. The two also have a high risk attached as rape is sensitive to extreme weather conditions and the productivity of corn halves during years with droughty summers.
“Farmers prefer rape as it is also the first product that brings them receipts at the beginning of the season,” says Chioreanu.
Rape is set to bring receipts of around EUR1,200/hectare this year and, according to the first estimates, this autumn’s corn crop productivity will be half this level, on the basis of market data.
Average receipts for rape have increased five times in the past seven years, while average receipts for corn have risen only 1.6 times, according to ZF calculations based on Eurostat data.
Rape in the autumn of 2013 covered around 400,000 hectares of farmland, up 50% from the 2012-2013 season, and farmers are now concluding the corn seeding campaign, with an area estimated at 2.5 million hectares, down 4% from the previous season.
US Monsanto is readying to enter Romania with a package of high-tech services aimed at monitoring and optimizing farm productivity. Technology is meant to limit down costs and boost productivity.
“In 2016, we’ll carry out the first tests in Romania together with several farmers,” says Chioreanu.
Tapping the agriculture technology market is part of Monsanto’s international development plan as innovation potential on the hybrid seed market is topping out. As a matter of fact, this is not the first time the US company is repositioning itself on the market in the context where Monsanto started out as a polystyrene and synthetic fiber producer, shifted to herbicides, insecticides and then to the market of genetically modified seeds and biotechnologies.
The Romanian market is a key one for Monsanto as it holds the widest corn areas in the EU and as it has a strategic position against Russia and Ukraine. The US company exports a large part of seeds multiplied domestically to former Soviet states.
(English version by Catalina Apostoiu)