New season: bountiful harvests and intense competition for export markets

In recent days, Lithuanian grain processors and exporters have received optimistic news about the new grain season. In the US, farmers can look forward to a bumper corn harvest, while in Europe a much bigger wheat harvest is expected (forecast at more than 20 million tonnes compared to last year).

Although the harvest in Lithuania is still in its infancy, preliminary forecasts are already available on what yields can be expected in Lithuania and neighbouring countries, as well as on the main challenges facing processors and traders.

These topics were discussed at the traditional summer conference of the Lithuanian Grain Processors and Merchants Association (LGPPA). The situation on the markets and harvest forecasts was presented by Gintaras Pauža, Head of „CM Kaunas / Copenhagen Merchants“.

An exceptionally good US harvest and the threat of trade wars

According to G. Pauža, until recently, when talking about grain yields and export flows, much attention was focused on the war in Ukraine, the functioning of the grain corridor and its impact on our region.Today, these topics have been relegated to the background, replaced by other issues.

First and foremost, the United States is forecasting a bumper maize harvest, which will significantly increase the overall global grain supply.

Another key topic – the risk of trade wars. Countries can get involved in trade conflicts, for which Mr Pauža foresees two possible scenarios: in the first case, the US succeeds in encouraging other countries to buy more American goods, including agricultural products. In the second, countries impose reciprocal import duties on each other, making goods more expensive and international trade less efficient.

World record cereal harvests

The world is expected to set new cereal harvest records this year. Maize harvests are forecast to exceed previous years by as much as 40–45 million tonnes, with US farmers' maize fields contributing the most to this growth. The US Department of Agriculture (USDA) also forecasts that the global wheat harvest will be around 9 million tonnes higher than last year. Of course, these figures may be revised as more information on harvest progress and yields in different regions becomes available.

„In the northern hemisphere, the harvest has already started or is about to start. If there are no major concerns about the quantity of the harvest, it seems likely that there will be no shortage of debate about quality in the coming weeks. Particularly worrying is the heavy rainfall, which may make harvesting more difficult and reduce the quality of food crops. The only remaining uncertainty will be the harvests in Australia and Argentina, the results of which will become clear later this year," said Mr Pauža.

Europe's harvest in full swing

How is the harvest progressing and what are the first quality indicators in different European countries?

• Spain: about 75% of wheat has been harvested; quality is rated excellent.
• France: about 70% of the wheat has been harvested. Some regions complain of lower protein content (below 11.5%), but in other regions the protein content is normal.
• Romania: about 80% of wheat harvested; prevailing grain protein content of 12.5% and above, but challenges due to grain pest damage.
• Germany: In this country, wheat threshing is just beginning, but the outlook for grain quality remains optimistic. A standard harvest is expected, both in quantity and quality.
• Russia: harvest is delayed – around 30% of the wheat has now been harvested in the country, which is 10% less than at this time last year. In the southern regions, yields are as much as 1.5 times lower than last year. Growers are not happy with the weight of the crop and are facing a number of challenges in terms of the number of falls. Sellers expect the fields in central Russia to compensate for the poorer yields in southern Russia.
• Ukraine: about 25% of wheat harvested. Around 30% of this is feed wheat and the remaining 70% is food wheat. In some regions of Ukraine, the protein content of the wheat harvested is particularly high, which is encouraging for the quality of the grain.

Baltic countries look forward to bigger harvests

The start of summer has been favourable for crop fields, which is expected to lead to a bumper harvest in our region. It is estimated that the wheat harvest in the three Baltic States could reach around 9.5 million tonnes – this would be around 2 million tonnes more than last year. In Lithuania, 5.5 million tonnes are expected, in Latvia – over 3 million, in Estonia – almost 1 million. The export potential would be around 7.5 million tonnes.

While the number of sunny days in the Baltic countries has been increasing recently, the persistent rain is a cause for concern, as it could lead to a loss of nutritional quality in some crops.

Main export competitor – Russia

In recent years, the Baltic countries' cereal exports have been mainly focused on Africa. For example, in the 2024–2025 season, around 35% of Baltic wheat exports went to Nigeria and around 11% to Morocco. However, Russia remains the strongest competitor on export markets. This country has already pushed Baltic grain out of the Saudi Arabian market. In Morocco, Baltic exporters have to compete with French wheat. This competition will only increase as the French return to their normal harvest of 32 million tonnes, some 6 million tonnes more than last year.

„With the increase in yields and export supply in our region, we will have to look for new outlets – it is not excluded that our exporters will have to step up their efforts to enter the Algerian market again and to take the risk of the very high quality requirements”, – commented G. Pauža.

Competition on world grain markets could be tough this year. While the world's population and overall food demand is growing, wheat consumption is not increasing as fast. There are several important reasons for this:

• Nutritional change and diversity. Wheat is increasingly being replaced by other products in many people's diets, such as rice, maize, oats or buckwheat.
• Economic and social factors. As living standards improve, diets are becoming more protein-rich and less carbohydrate-rich, so traditional cereals are being slightly reduced.
• Health trends. Gluten-free diets and other nutritional principles are becoming increasingly popular to limit the consumption of wheat and other gluten-containing products.

For these reasons, cereal traders and exporters, even with large harvests, have to compete intensively for the attention of buyers on the international market.

Challenges for the new season

„The coming season promises to be full of challenges for cereal producers, processors and exporters. The international situation remains unpredictable – conflicts and political tensions can affect both demand and logistics chains at any time. The exchange rate between the euro and the US dollar has a strong impact on the competitiveness of Lithuanian and neighbouring countries' grain on international markets – the strengthening of the euro can reduce exporters' revenues and fluctuations make price negotiations more difficult. It is clear that the new season will not only bring the joy of a bountiful harvest, but will also require skill and flexibility to navigate a complex global market. Nevertheless, it is hoped that the experience and flexibility we have gained will help our exporters to meet the challenges ahead," concludes Mr Pauža.