European farmers look to have little option but to stick with wheat as they plant crops for harvesting next year with only a marginal decline in area seen despite a sharp drop in prices.
Farmers were quick to plant more wheat when prices soared last year, with area in Britain climbing 13 per cent, but the response to the market’s decline has been much more muted despite stubbornly high input costs.
“The planting decision was exceptionally difficult for farmers this year with prices falling for just about every crop,” one German analyst said.
Analysts said wheat remains the most profitable crop for many European farmers despite the drop in prices, with yields often substantially higher than alternatives such as barley.
Milling wheat futures in Paris surged in September 2007 as high as 300 euros a tonne on the benchmark second month, encouraging a sharp rise in plantings.
A record world crop and the global economic crisis have, however, led to prices falling to less than half that level.
The United Nations’ Food and Agr icul ture Organization said in its Food Outlook issued Nov. 6 that area planted for wheat in the EU could fall by about two per cent, citing falling prices and high costs for inputs such as fertilizers.