In the report, the USDA said showers in May came in late for the large majority of the grain producing regions. Spanish harvesting operations start in late May to early June in the southernmost grain growing areas. Part of the grain crop is being harvested for hay or used as pasture, which further reduces grain yielding potential.
Source: MAPAMA data and FAS Madrid estimates.
“Depending on the size of the domestic grain crop, the livestock sector demand and the price relations between the different ingredients comprising the feed formula, Spain has an annual grain deficit of between 9 million tonnes and 12 million tonnes,” the USDA said. “Even in years when domestic grain supplies are ample, the Spanish grain production is not sufficient to meet the country’s needs for feed, food or biofuels.”
On top of the sharp production decline anticipated, the limited pasture availability will result in increased import needs compared to the previous season. Consequently, Spain will be forced to import in market year 2017-18 a significant amount of grains to meet its shortfall. However, lower grain prices throughout market year 2016-17 encouraged farmers to build up stocks, the USDA noted. In light of poor crop expectations for market year 2017-18, domestic grain sale operations have slowed down, as old-campaign stocks are being stored, which partially will make up for the new season’s shortage.
As far as the composition of the feed formula is concerned, the bumper crop registered in market year 2016-17 allowed for an extensive use of domestic wheat and barley and still permitted stocks being built, the USDA said. As the aftermath of the short crop anticipated for market year 2017-18, Spanish livestock growers will be feeding significantly less barley to their animals. Increased corn imports and, to a lesser extent higher wheat imports, will offset the production decline.