Medium-term prospects for agricultural markets 2004 - 2011 Update for EU-25 1 European Commission -...

Medium-term prospects Medium-term prospects for agricultural markets for agricultural markets

2004 - 20112004 - 2011

Update Update for EU-25for EU-25

1European Commission - Agriculture Directorate-General

• Analytical approach

– Methodology

– Main assumptions

Structure of the presentation

Introduction

• Medium-term prospects for the EU-25

– Cereals

– Oilseeds

– Meats and eggs

– Milk and main dairy products

Main results


Methodological approach

• DG AGRI market projections carried out using a recursive dynamic partial equilibrium model and a comparative static model (ESIM)

• Model output: balance sheets for main commodities, market prices

• Detailed results for

– Old (EU-15)

– New (EU-N10) Member States

for main commodities/variables

Type of models

3

Results

European Commission - Agriculture Directorate-General

Methodological approach

• Uruguay Round Agreement on Agriculture maintained constant

• Favourable, though moderate world agricultural market outlook

• Return to modest economic and population growth

• $/euro exchange rate stable at 1.1 over the medium-term

• By 2011 direct payments are assumed to be 90% decoupled (milk 100 %, arable crops 93 %, beef 78 %, sheep 73 %)

Main assumptions


Results for the crops

• Favourable outlook for cereals markets

• Only moderately increasing domestic use due to

– less expansive growth of livestock sector

– gain in feeding efficiency in new Member States

• Transport costs separate the maize markets in the EU

– increasing use of maize for feed

– increasing exports of maize

• Loss of competitiveness of barley as feed grain and moderately increasing public barley stock

• Developments depend on world grain markets and currency environment

5


Broadly balanced cereal market over the medium-term

Production and consumption, 1995 - 2011 (mio t)


0

50

100

150

200

250

300

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Feed use

Non-feed use

Production

EU-15 EU-25

Positive medium-term outlook stabilises cereal markets

Cereal trade and stocks, 1995 - 2011 (mio t)


0

10

20

30

40

50

60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Private stocks

Public stocks

Exports

Imports

EU-15 EU-25

Cereal markets : limited build up in cereal stocks

Total public stocks, 1995 - 2011 (mio t)


0

2

4

6

8

10

12

14

16

18

20

22

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

wheat barley rye maize

coarse grain exports

EU-15 EU-25

Good medium-term perspectives on soft wheat markets

Soft wheat production, domestic use and trade, 1995 - 2011 (mio t)


0

20

40

60

80

100

120

140

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

EU-15 EU-25

production

non-feed use

feed useexports

imports

Barley: decline of competitiveness

Barley production, domestic use, trade and public stocks, 1995 - 2011 (mio t)


0

10

20

30

40

50

60

70

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

feed use

non-feed use

production

exports

imports

public stocks

EU-15 EU-25

Maize: segmented markets, increasing use and exports

Maize production, domestic use, and trade 1995 - 2011 (mio t)


0

10

20

30

40

50

60

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

production

feed use

non-feed use

importsexports

EU-15 EU-25

Rye: returning to stable market conditions

Rye production, domestic use, trade and public stocks 1995 - 2011 (mio t)


0

2

4

6

8

10

12

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

production

non-feed use

feed use

public stocks

exports

imports

EU-15 EU-25

Positive medium-term perspectives for the oilseed markets

Market developments for the oilseed sector 1995 - 2011


0

5

10

15

20

25

30

35

40

45

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Domestic use

Production

EU-15 EU-25

Results for the meat and dairy sector

• Favourable outlook for the meat sector

– Return to more normal situation after market disruptions due to animal diseases (2nd BSE crisis, FMD, avian flu)

– EU-25 beef consumption higher than production in 2003 for the first time in 20 years (and throughout the forecast period)

– Pork and poultry production to keep growing over the medium term, with increased trade flows between old and new Member States

• Improvement in EU dairy markets

– Milk production in EU-25 to increase slightly in line with quota increases

– EU-25 butter and SMP market equilibrium to gradually improve, with decreasing production and stocks

– Cheese production in the EU-25 to keep its sustained growth

14


EU beef demand to exceed production over the medium-term

EU Production, Consumption, Trade and Stocks (mio t)


0

1

2

3

4

5

6

7

8

9

10

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pro

du

cti

on

, C

on

su

mp

tio

n

0,0

0,5

1,0

1,5

2,0

2,5

Tra

de

, S

toc

ks

Production

Exports

ImportsEnding stocks

EU-15 EU-25EU-12

Consumption

EU pig meat sector to continue to expand over the medium-term

EU Production, Consumption and Trade (mio t)


0

5

10

15

20

25

30

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pro

du

cti

on

, C

on

su

mp

tio

n

0

1

2

3

4

5

6

Tra

de

Production

Consumption

Exports Imports

EU-15 EU-25EU-12

EU poultry production to recover after avian flu in the Netherlands



0

3

6

9

12

15

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pro

du

cti

on

, C

on

su

mp

tio

n

0,0

0,5

1,0

1,5

2,0

2,5

3,0

Tra

de

ProductionConsumption

Exports

Imports

EU-15 EU-25EU-12

EU sheep/goat meat sector only slightly affected by enlargement



0,0

0,5

1,0

1,5

2,0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pro

du

cti

on

, C

on

su

mp

tio

n

0,0

0,5

1,0

Tra

de

Production

Consumption

Imports

EU-15 EU-25EU-12

Exports

Milk quotas to constrain EU milk production while growing milk yields reduce dairy cow herd

EU Milk Production, Deliveries to dairies, Dairy Cows


0

20

40

60

80

100

120

140

160

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Mil

k p

rod

uc

tio

n a

nd

de

liv

eri

es

(m

io t

)

0

5

10

15

20

25

30

35

40

Nu

mb

er

of

da

iry

co

ws

(m

io h

ea

ds

)

Milk Production

Dairy cow herd

Milk Deliveries

EU-12 EU-15 EU-25

EU butter balance to improve over the medium-term

EU Production, Consumption, Trade and Stocks


0,0

0,5

1,0

1,5

2,0

2,5

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pro

du

cti

on

, C

on

su

mp

tio

n

0,0

0,2

0,4

0,6

0,8

1,0

Tra

de

, S

toc

ks

Consumption

Production

Stocks

Exports

Imports

EU-15 EU-25EU-12

EU cheese market keeps its steady growth over the medium term

EU Production, Consumption and Trade


0,0

1,0

2,0

3,0

4,0

5,0

6,0

7,0

8,0

9,0

10,0

Pro

du

cti

on

, C

on

su

mp

tio

n

0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

2,0

Tra

de

Consumption

Production

Exports

Imports

EU-15 EU-25EU-12

EU Skimmed Milk Powder (SMP) market to shrink over the medium term

EU Production, Consumption, Trade and Stocks


0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Pro

du

cti

on

, C

on

su

mp

tio

n

0,0

0,2

0,4

0,6

0,8

1,0

Tra

de

, S

toc

ks

Consumption

Production

Stocks

Exports

Imports

EU-15 EU-25EU-12

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