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The Maize Market & Economy
Grain Maize
En France
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Grain crops in France are grown over some 9 million hectares. Grain maize is classified as one of these grain crops, while silage maize is categorised as silage (or fodder) and sweet corn is categorised as a vegetable. Ranked according to acreage, grain maize comes behind wheat (c. 5 million hectares environ) and is at a similar level to barley. The volume produced in a normal year is around 15 million tonnes (excluding extreme climate effects) for total French grain production of 60 to 70 million tonnes depending on the year (including 30-35 million tonnes of wheat and 10-12 million tonnes of barley).
40% of grain maize in the greater south-west of France Grain maize acreage in France is mainly in the south-west of the country, including the region of Aquitaine which is the cradle of maize and leader in France, followed by the regions of Midi-Pyrenees and Poitou-Charentes. The greater south-west region has approximately 640 000 hectares, i.e. 40% of France’s grain maize acreage. |
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Production back to 16 million tonnes Production has been developing continually, backed by clear genetic improvements and by 2000-2004 had reached 15 million tonnes (or over 16 million tonnes, when factoring out the drought in 2003 with only 12 million tonnes). The revival in 2004, reaching 16.4 million tonnes, proved to be short-lived and climate events in subsequent years caused maize losses of 3 million tonnes, bringing the French harvest down to 13 million tonnes in 2005 and 2006. In 2008, it was back to 16 million tonnes boosted by increases in both acreage and yield.
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A steady yield over 90 q/ha Maize is the crop with the highest yield per hectare, often around 90 quintals per hectare, or even more. And maize is a record-setting crop, as was proved in 2007 when the yield reached an all-time high at c.100 q/ha. By 2008, it was back to 93 q/ha.
Grain Maize Production in France – Trends| Source SCEES | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | | Surfaces (Mha) | 1.8 | 1.9 | 1.8 | 1.6 | 1.8 | 1.6 | 1.5 | 1.5 | 1.6 | | Rendement (q/ha) | 91 | 86 | 90 | 72.5 | 90 | 83 | 86 | 97 | 93 | | Production (MT) | 16 | 16.5 | 16 | 12 | 16 | 13.5 | 13 | 14.5 | 14.8 | The Market
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Most grain maize produced is traded on the market The main outlet for maize, whether harvested as grain or silage, is for animal feed, e.g. grain for poultry, sheep and pigs and silage for cattle. Grain maize harvested is either used directly as animal feed, i.e. on-farm consumption, or sold on the market after the produce has been collected, the next stage after growing. Any direct sales not going through collecting entities must be no more than 5 quintals, a negligible quantity.
The collection of grain maize, i.e. sales by growers to collecting entities such as cooperatives and grain dealers, accounts for some 12 million tonnes. The collecting entities then supply the national domestic market (cattle feed manufacturers, the starch and milling industries and soon ethanol), plus the export market, mainly to the EU. The resource produce is mostly collected from the current crop, but also includes stocks from the previous season (on average, 2 million tonnes) plus some imports which, in an average year, are relatively small but are needed for specific uses, often in industry (e.g. for manufacturing corn flakes). In 2007, however, imports were at a very high level to maintain the market balance (1 million tonnes compared to c. 0.3 million tonnes); most were from Brazil (c. 50%). The figures for the 2008 season show a return to normal import levels with 0.3 million tonnes.
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The main outlet: animal feed
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The average quantity of grain maize sold on the domestic market is 5 to 6 million tonnes. The animal feed sector is the main outlet for grain maize in France, consuming a total of 4 to 5 million tonnes, including an average of 3 million tonnes for cattle feed manufacturers; the difference does not end up on the market, but is used directly for on-farm consumption. The animal feed sector has the greatest fluctuations from one season to the next, being affected by agricultural commodity prices, in particular wheat, the main grain competitor. Next is the industrial sector with a total which, over recent years, has been close to 2.4 million tonnes, with one part then being exported (c. 1.6 million tonnes), including exports to third countries. Starch manufacturing is the main industrial sector and consumes some 2 million tonnes of maize; it is followed by milling with just under 0.4 million tonnes. A first in France – ethanol from maize feedstock The Abengoa Bioenergy France ethanol production plant in Lacq (Atlantic Pyrenees) has been commissioned and as of 2008 there has been an additional production outlet requiring 0.5 million tonnes, the equivalent of 10% of maize produced in the south-west region, or in terms of acreage, 60 000 hectares. Of a total of 200 000 tonnes of ethanol manufactured, 160 000 tonnes will be produced from maize feedstock, the rest being from wine alcohol Exports
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France’s maize market focused on export France is Europe’s leading maize producer and, most importantly, the leading European exporter of maize. Grain exports can change considerably from one season to the next, depending on volumes available. Early in the decade, and excluding 2003, a severe drought year, French grain exports were in the vicinity of 8 million tonnes, but since 2004/05, there has been a steady decline in volumes, reaching 5 million tonnes in 2007.  |
In addition to grain exports, there are industrial exports (starch and milled products) that usually reach 1.6 million tonnes. Exports in 2008/09 amounted to 7.6 million tonnes, including 5.5 million tonnes to countries in the 27-member European Union.
With the New Member States that have joined the EU, in particular Hungary, France now has to contend with a new competitor on traditional markets such as Germany, Italy and even Greece. Despite some difficulties with infrastructure and logistics, Hungary, depending on the level of production, is in a position where it can export between 2 and 4 million tonnes of maize. And another New Member State also has high potential for producing and exporting grain maize – Romania.
95% of France’s maize exports to EU countries Most of France’s grain maize (95% or more of the total amount exported) goes to the EU. It is virtually impossible to export to third (non-EU) countries as the European Commission has not granted any claims or subsidies designed to make up for the difference between EU prices and global prices and which could help French and European maize be competitive. The only contracts with third countries (for approx. 0.2 million tonnes) are covered by specific arrangements such as food aid. Traditionally, France’s main customers have been Spain, the Netherlands and the United Kingdom, countries which, in a normal year, account for around 70% of French sales. The year 2007, however, was an exception to normal trading patterns, with a higher level of imports and with market shares lost to Brazilian maize and to Argentine maize on the Spanish market. In 2006/2007, Spain purchased supplies from France for a total of 1.8 million tonnes in 2006/07 (as of May 1), but for the same period in 2007/08, the figure was only 1.2 million tonnes – a drop of 33%! |

The 27-member EU
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|  | 9 million hectares in the 27-member EU Excluding major climate effects, grain maize acreage in the 27-member EU is around 8.5 million hectares, and in 2008/09, it reached 9 million hectares. Since the new Central European Member States joined the EU, Romania has been the country with the most acreage in Europe, ahead of France, Hungary and Italy.
Production levels fluctuating in line with climate conditions
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Some of the yield levels found in the EU (e.g. in France and Italy) are amongst the highest in the world, one reason being irrigation which has almost become a compulsory practice in a number of countries in southern Europe where it would be impossible to farm without additional water (in Portugal, Spain and Greece). As production levels are affected by climate contingencies, there can be quite substantial fluctuations from one year to the next. The 2007 season provides a perfect illustration of this: after widespread drought, which was particularly harsh and long in eastern Europe (Hungary and Romania), EU production went down to 47 million tonnes, whereas in previous seasons it had been 55 to 60 million tonnes. When including the volume produced in other countries in Europe, such as Ukraine, production on continental Europe reached 67 million tonnes for 2007/08.
In 2008/09, production by the 27-member EU was in excess of 60 million tonnes, with total volume for Europe being over 80 million tonnes.
France is the leading maize-producing country in the European Union, with some 30% of total maize production in the 27-member EU; next comes Italy with annual production in a normal year around 10 million tonnes, mostly grown in the Po Plain, and then Hungary which, in an average year, can produce 8 or even 9 million tonnes, or drop down to only half that level, as was the case in 2007. The situation is similar for Romania where production in 2008 was 8 million tonnes (as opposed to 3.5 MT in 2007). Initial forecast figures for 2009 suggest that production will be 5 million tonnes less than in 2008.
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A shortfall in 2007 requiring 13 million tonnes in imports Before EU enlargement including New Member States in Central Europe, France was the only country able to cover shortfalls in production in neighbouring countries. The market was balanced through “compulsory” maize imports in Spain and Portugal for a total of 2 million tonnes under the terms of European Community-US agreements at the time that Spain and Portugal joined the Union. France is no longer the only European country able to satisfy demand from partner countries; now there is also Hungary with 2 to 4 million tonnes in potential depending on the season and even Romania. However, the 2007/08 season, with a substantial shortage of available produce because of sharp cuts in production required maize imports in large quantities (13 million tonnes) from third countries (e.g. Brazil and Argentina). Across the EU, as in France, animal feed is the main outlet, well ahead of starch, milling and other industrial uses. |
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GLOBALLY
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The number one grain Maize is the most widely grown plant in the world and the leading grain crop ahead of wheat. Total maize acreage is 160 million hectares, producing some 770 million tonnes, which gives an average yield of approximately 50 quintals per hectare. In 2007/08, production increased to almost 800 million tonnes, mainly because of a record American crop, over 330 million tonnes. There was a slight drop in 2008.
60% of maize around the world is American and Chinese Around ten countries grow almost all of the maize in the world, but the main maize producers are the USA and China, followed by Brazil and the 27-member EU, competing for third position depending on the year.
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* UE à 25| | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | | Total monde | 626 | 713 | 696 | 702 | 787 | 771 | | Dont | | | | | | | | USA | 257 | 300 | 282 | 268 | 332 | 305 | | Chine | 116 | 130 | 139 | 145 | 152 | 156 | | UE-27 | 40* | 54* | 60 | 55 | 47 | 62 | | Brésil | 42 | 35 | 42 | 51 | 59 | 55 | | Mexique | 22 | 22 | 19 | 22 | 24 | 23 | | Argentine | 15 | 20 | 14 | 22 | 21 | 20 | | Inde | 15 | 14 | 15 | 15 | 19 | 18 | | Afrique du Sud | 10 | 12 | 7 | 7 | 12 | 10 | The USA grows approximately 40% of global production with figures, depending on climate contingencies, in the vicinity of 300 million tonnes. National acreage is around 35 million hectares, i.e. 25% of global maize acreage. In 2007, the US harvested a record crop of 332 million tonnes when acreage went up to 37 million hectares and average yield was around 90 q/ha.
China is the world’s second largest maize producer also with very high levels but substantially less than the US figures: approx. 150 million tonnes and 25 million hectares. Production in other countries (40% in all) is at much lower levels, mostly in Brazil and the EU, each with an annual average of 50 to 60 million tonnes excluding climate events (e.g. in 2007 for the EU). The next significant players are Mexico, Argentina, India, Indonesia and even South Africa.
Steadily rising demand Maize consumption around the world has been constantly expanding, going above 700 million tonnes in 2005/06, and getting close to 800 million tonnes with increasing quantities processed for animal feed and also for industrial applications such as ethanol. In 2008, the breakdown of global consumption of 773 million tonnes was 60% for the animal feed sector (c. 470 million tonnes), 24% for the industrial sector (c. 190 million tonnes) and the rest for human consumption.
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The USA – more than one-third of global consumption The main maize-consuming countries are the USA with ever-increasing consumption, now close to 270 million tonnes, i.e. more than a third of total global consumption, and with a sharp increase of 30 million tonnes in just one year (230 million tonnes in 2006/07). In the USA some 80% of the maize produced is processed. Animal feed is still the largest maize-consuming sector, although the proportion of total use has been decreasing as ethanol increases; in the mid‑1990s feed accounted for three-quarters of maize consumed in the USA. At the same time, the ethanol market has been expanding, going from 6% (c. 10 million tonnes) to almost 40% of total maize consumption (c. 100 million tonnes).
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More than 10% of global maize production traded around the world Global grain trade covers 220 to 230 million tonnes, including 100 to 110 million tonnes of wheat, a relatively steady level. For a long time, trading in maize remained low (60 to 80 million tonnes depending on the year), but over recent years it has caught up with wheat. In 2007, similar volumes of maize and wheat were traded around the world (respectively 100 and 110 million tonnes), but this trend was soon reversed and the difference became greater in 2008/2009.
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60% of global exports are from the US One of the features of the maize market is that trading is by only four or five countries, with the USA predominating, although this American domination is not as great as it was in the past, as a number of smaller countries are now competing with the US on its traditional markets, countries such as Brazil and Argentina for GM crops, and also with more competitive pricing.
Asia – leading global importers, in particular Japan Supplies may be concentrated, but there are many maize-importing countries, and Asia is the leading area importing maize, accounting for almost 40% of total global imports, with sustained demand from Japan, the world’s largest importer with steady import volumes of around 16 million tonnes. In general, the 27-member EU is only a partial importer of maize, with some 3 million or sometimes 5 million tonnes. However, in 2007, with the drought and a supply shortage, the EU was forced to make purchases on the global market, buying the exceptionally high quantity of 13 million tonnes.
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