Wheat price to rise 17%, corn up 13.5%, but soy down 3% by 2032: EU

European cereal prices are expected to remain below the peaks seen in 2006 and 2012 but will remain above the five-year average over the next 15 years, according to a new report by the EU Commission published Monday.

Wheat prices are expected to climb from their current level of €166/mt ($196/mt) this year to €194/mt, while corn is expected to rise from $155/mt to $176/mt, according to the EU Agricultural Outlook.

The rise comes against a backdrop of low land availability, recovering energy prices and solid demand, the EU said, warning that price spikes “cannot be ruled out, particularly in response to climate events”.

Total area that is being farmed in the EU has been on the slide for years, and that trend is expected to continue with arable area to fall 2.2% from 176 million mt to 172 million hectares.

Bucking that trend is land planted for cereals, which is expected to increase to 57 million hectares from 56 million, which will lead to an increase in production of cereals of 13% over current levels to 341 million mt by 2030.

“(This is) driven by feed demand, good export prospects (in particular for feed wheat) and increasing use of cereals in industry. However, stronger growth will be held back by the limited potential for expanding the areas under cultivation and by slower yield growth in the EU than in other regions of the world,” the report said.

The rise in prices comes despite an anticipated reduction in demand from the fuel sector for total fuel use as a result of electrification of the car fleet, behavioural changes in terms of driving and improving efficiency.

Ethanol production is expected to slide from 3.7 million mtoe to 3.5 million by 2030, with biodiesel falling from 10.6 million mtoe to 9.7 million mtoe.

That in turn will exert downward pressure on rapeseed production in the EU, the report said.

However, despite the rise in grains, the price of soybean is expected to fall as production rises over the next 15 years.

The EU Commission said soybean prices would fall from €356/mt to €343/mt, with production to rise to 3 million from 2.7 million mt.

“Increasing demand for protein meals will mainly be met by increasing soya bean imports and by domestic soya bean production,” the report said.