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Wet and cold conditions trimming hopes for UK sowings - Origin

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Origin Enterprises undermined hopes of a full recovery in UK crop area for the forthcoming harvest, but eased worries over Romania and, in particular, for Ukraine for which sowings were now seen rising year on year.

 

The owner of the Agrii agronomy chain pegged at 1.7m tonnes UK winter wheat area for the 2021 harvest a figure which while up some 700,000 hectares from last year, when persistent rains hampered sowings, was some 100,000 hectares below its initial estimate.

 

The group, underlining that the figure was “lower than the area” which had been expected, attributed the downgrade to “continued wet and cold conditions” – which it said “may delay” the onset of the s spring sowings campaign too.

 

All-crop sowings, although up 10.4% year on year, were seen expanding a little less significantly than previously expected, to 4.4m hectares, still a little below 2019 levels.

 

Origin Enterprises said that “although farm sentiment has improved… farmers are facing challenges across the UK with prolonged cold and wet weather”.

 

Ukraine upgrade

For Poland, the group trimmed expectations for winter crop sowings too, by some 100,000 hectares to 4.6m hectares, viewing total sowings for the 2021 harvest falling “0.9% behind the prior year at 8.1m hectares”.

 

However, Origin was more upbeat over Romania, where in the November-to-January period, “most of the cropped area received sufficient rainfall to allow soil moisture levels to return to more normalised levels” after a dry start to autumn.

 

The estimate for seedings of winter crops was raised by 100,000 hectares to 3.0m hectares, feeding into a similar upgrade to 8.3m hectares in the estimate for all-crop sowings, although still down 1.1% year on year.

 

And for Ukraine, the group raised sowings estimates too, by 400,000 hectares to 8.1m hectares for winter crops, and including spring-seeded crops such as corn and sunflowers as well, lifting its forecast by 900,000 hectares to 24.2m hectares

 

The upgrade took the figure 1.9% above last year’s total, said Origin, in a second vote of confidence on Thursday for Ukraine’s crop prospects this year, coming as the UN Food and Agriculture Organization forecast that the country will see an improved wheat harvest.

 

Kernel Holding, by contrast, Ukraine’s largest farmer, last week noted an "above average" winterkill threat for its winter rapeseed and wheat.

 

Narrowing losses

The comments came as Irish-based Origin Enterprises reported a 65% narrowing to E2.54m in losses for the August-to-July half, typically its weaker period, on revenues down 5.4% at E572.4m.

 

At an operating level, the company reported a return to profit, of E1.22m, compared with a E2.79m loss a year before, an improvement which “was largely as a result of a more normalised cropping profile across the group, set against last year’s highly unseasonal and prolonged weather conditions”.

 

Indeed, the improvement reflected largely a narrowing of some 70%, to E2.7m, in operating losses at the Ireland and UK division particularly badly affected by wet conditions a year before.

 

Nonetheless, Sean Coyle, the Origin Enterprises chief executive, said that the weakened UK plantings estimate for 2021, “together with the renewed Covid-19 restrictions across all of our geographies, means that trading uncertainties remain” as the group navigates the second half of its financial year.

 

Origin Enterprises shares stood 5.1% lower at E3.465 in afternoon deals in Dublin.

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