Prospects for EU-27 agricultural markets and income 2006-2013.

33
Prospects for EU-27 agricultural markets and income 2006-2013

Transcript of Prospects for EU-27 agricultural markets and income 2006-2013.

Page 1: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for EU-27 agricultural

markets and income

2006-2013

Page 2: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 2

Structure of the presentation

Introduction– Analytical approach

• Methodology• Main assumptions

Main results:– Projections for cereals, oilseeds, sugar, meat,

eggs and dairy products– Income projections

Page 3: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 3

Methodological approach

Type of models: DG AGRI market projections carried out using two recursive dynamic partial equilibrium models and a regional model

Results: model output consists of supply balance sheets for main commodities, market prices and income

Detailed results for:– Old Member States (EU-15)– Member States acceded May 1st 2004 (EU-10)– Member States acceded Jan. 1st 2007 (EU-2)– EU-27For main commodities (cereals, oilseeds, sugar, meat, eggs

and dairy)/variables

Page 4: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 4

Methodological approach Main assumptions:

– Uruguay Round Agreement on Agriculture maintained constant

– Favourable, though moderate world agricultural market outlook

– Return to modest economic and population growth

– $/€ exchange rate to reach 1.15 by 2013– By 2013 direct payments are assumed to be

91% decoupled (milk 100 %, arable crops 96 %, beef 79 %, sheep 82 %)

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Prospects for agricultural markets and income 2006-2013, January 2007 5

Assumptions for $/€ exchange rate and GDP growth

0.4

0.6

0.8

1

1.2

1.4

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

0

1.5

3

4.5

6

7.5

GDP growth

$/euro exchange rate

GDP growth$/euro exchange rate

Page 6: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets 2006-2013

Cereal, oilseed and sugar sectors

Page 7: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 7

Crops medium term perspective appears moderately positive for

crop markets in line with: – CAP reform and decoupling;– improving domestic use (emerging biofuel industry and

feed); – favourable world market conditions and– the expected return to improved exchange rate conditions– high medium-term risk of regional imbalances of maize

due to difficulties of integration into the single market and limited competitiveness of pork and poultry production.

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Prospects for agricultural markets and income 2006-2013, January 2007 8

Slightly expanding cereal markets and emerging bioethanol markets….

Development of cereal markets in the EU, 1995-2013 (mio t)

0

50

100

150

200

250

300

350

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

production

non-feed use

feed use exports

imports

EU-15 EU-25 EU-27bioethanol

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Prospects for agricultural markets and income 2006-2013, January 2007 9

… lead to a modest growth in overall EU cereal stocks ….

Development of stocks and cereal exports in the EU, 1995-2013 (mio t)

0

10

20

30

40

50

60

70

80

90

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

private stocks

public stocks

exports

EU-15 EU-25 EU-27

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Prospects for agricultural markets and income 2006-2013, January 2007 10

…and change in the composition of public stocks …

Composition of public stocks in the EU (mio t), 1995-2013

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 2012 2013

wheat barley rye maize

EU-15 EU-25 EU-27

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Prospects for agricultural markets and income 2006-2013, January 2007 11

… indicating a sharp separation of economic conditions on

cereal markets in EU regions Regional distribution of public stocks in the EU (mio t), 1995-2013

0

2

4

6

8

10

12

14

16

18

20

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

EU-15 EU-25 EU-27

EU-15 EU-N10 EU-N2

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Prospects for agricultural markets and income 2006-2013, January 2007 12

Good overall perspectives on soft wheat markets – with regional appearance of public stocks…..

Development of soft wheat markets in the EU (mio t), 1995-2013

0

20

40

60

80

100

120

140

160

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

EU-15 EU-25

production

non-feed use

feed use exportsimports

public stocks

EU-27 biofuel

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Prospects for agricultural markets and income 2006-2013, January 2007 13

…further stabilisation of barley production and regional competitiveness in feed use in the short term,

Development of barley markets in the EU (mio t), 1995-2013

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 2012 2013

feed use

non-feed use

production

exportspublic stocks

EU-15 EU-25 EU-27

Page 14: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 14

…growing competitiveness of maize use after 2008 but segmentation of markets due to high transport costs and high risk of regional public stocks…

Development of maize markets in the EU (mio t), 1995-2013

0

10

20

30

40

50

60

70

80

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

production

feed use

non-feed use

importsexports and imports

EU-15 EU-25

public stocks

EU-27 biofuel

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Prospects for agricultural markets and income 2006-2013, January 2007 15

.. very positive prospects on rye markets with firm prices over the medium term…….

Development of rye markets in the EU (mio t), 1995-2013

0

2

4

6

8

10

12

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

production

non-feed use

feed use

public stocks

exportsimports

EU-15 EU-25 EU-27

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Prospects for agricultural markets and income 2006-2013, January 2007 16

… favourable prices should raise incentives to produce durum wheat.

Development of durum wheat markets in the EU (mio t), 1995-2013

0

2

4

6

8

10

12

14

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

production

domestic use

imports

Exports

EU-15 EU-25

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Prospects for agricultural markets and income 2006-2013, January 2007 17

Positive perspectives on oilseed markets increase of yield and area (0.6 mio ha mainly

rapeseed) increase production (+7.4 mio t) to32 mio t in 2013 (vs. domestic demand of 64 mio t);

energy oilseeds production would increase under current policies but demand would outpace production;

rapeseed and rapeseed oil imports foreseen to increase;

EU remains major net importer of oilseeds and vegetable oils.

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Prospects for agricultural markets and income 2006-2013, January 2007 18

Sugar markets: Large gains in competitiveness to be reached over the medium term……

0

5

10

15

20

25

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

EU-15 EU-25

production

Food and industrial use

exports imports

total stocks

EU-27bioethanol

intervention stocks

Development of sugar markets in the EU (mio t), 2002-2013

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Prospects for agricultural markets and income 2006-2013, January 2007 19

…..with downside and upside risks.

Downside risk factors dominate the short to medium term…..– slow uptake of restructuring and

– very high levels of stocks

– weigh heavily on the supply side post 2010;

…while upside risks determine the medium to long term: – good conditions on world markets with relatively high prices and

– expanding markets in the EU in particular by bioethanol as well as the increasing share of sugar in the total sweetener market through

– gains in competitiveness of supply.

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Prospects for agricultural markets 2006-2013

Meat sector

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Prospects for agricultural markets and income 2006-2013, January 2007 21

Meat Beef production to continue falling (-6%) below consumption

throughout the projection period due to:– Declining cattle herd from dairy sector– Impact of decoupling of direct payments– Impact of market disruptions of sanitary crises

Pig meat production expected to keep its slight growth thanks to:– Solid demand both in the EU-15 (+4%) and in the EU-12 (+2.5%)– Exports to decline slightly due to greater competition from low cost

exporters, imports to remain at low level Poultry meat demand and production to remain strong (+7%)

EU sheep/goat meat production to continue its declining trend, albeit at a moderate pace

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Prospects for agricultural markets and income 2006-2013, January 2007 22

EU to remain net importer of beefEU production, consumption, trade and intervention stocks (mio t c.w.e.)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

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

tocksProduction

Exports ImportsEnding stocks

EU-15 EU-25EU-12

Consumption

EU-27

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Prospects for agricultural markets and income 2006-2013, January 2007 23

Growth rates for pig meat production and consumption are expected to be lower than in the 90s

EU production, consumption and trade (mio t c.w.e.)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Pro

du

cti

on

, C

on

su

mp

tio

n

0.0

1.0

2.0

3.0

4.0

5.0

6.0

Tra

de

Production

Consumption

Exports

Imports

EU-15 EU-25EU-12 EU-27

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Prospects for agricultural markets and income 2006-2013, January 2007 24

EU poultry production to keep its growth over the medium term in line with growing consumption

EU production, consumption and trade (mio t c.w.e.)

0.0

3.0

6.0

9.0

12.0

15.0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Pro

du

cti

on

, C

on

su

mp

tio

n

0.0

1.0

2.0

3.0

4.0

5.0

Tra

de

Production

Consumption

Exports

Imports

EU-15 EU-27EU-12 EU-25

Page 25: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 25

A slight decline in EU sheep and goat production is to be counter-balanced by growing imports

EU production, consumption and trade (mio t c.w.e.)

0.0

0.5

1.0

1.5

2.0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Pro

du

cti

on

, C

on

su

mp

tio

n

0.0

0.5

1.0

Tra

de

Production

Consumption

Imports

EU-15 EU-27EU-12

Exports

EU-25

Page 26: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets 2006-2013

Milk and dairy sector

Page 27: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 27

Milk and dairy products Medium term perspective appear positive for EU

dairy markets thanks to the:– Increase in domestic demand for cheese and other

value-added dairy products– Decrease in production of residual bulk products like

butter and SMP facing lower support and market prices

Increasing use of milk for the production of cheeses and other high value-added dairy products for the domestic market limits availabilities for exports

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Prospects for agricultural markets and income 2006-2013, January 2007 28

EU milk production constrained by quota with declining dairy herd size

EU milk production, deliveries to dairies, dairy cows

0

20

40

60

80

100

120

140

160

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

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-27EU-25

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Prospects for agricultural markets and income 2006-2013, January 2007 29

EU cheese market keeps its steady growth over the medium term (+8%, driven by EU-12)EU production, consumption and trade (mio t)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

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

2.2

Tra

de

Consumption

Production

Exports

Imports

EU-15 EU-25EU-12 EU-27

Page 30: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 30

Balance of EU butter market to improve with production and consumption to decline by 4 % and 2%

EU production, consumption, trade and intervention stocks (mio t)

0.0

0.5

1.0

1.5

2.0

2.5

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

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-27

Page 31: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 31

A stable demand should benefit to EU SMP markets and constrain export levels

EU production, consumption, trade and intervention stocks (mio t)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Pro

du

cti

on

, C

on

su

mp

tio

n

0.0

0.2

0.4

0.6

0.8

Tra

de

, S

toc

ks

Consumption

Production

Imports

Exports

Stocks

EU-15 EU-25EU-12 EU-27

Page 32: Prospects for EU-27 agricultural markets and income 2006-2013.

The development of agricultural income

Prospects for agricultural markets and income 2004-2013

Page 33: Prospects for EU-27 agricultural markets and income 2006-2013.

Prospects for agricultural markets and income 2006-2013, January 2007 33

Favourable medium-term perspectives for farm income notably in the EU-12

2004 2005 2007 2008 2009 2010 2011 2012 2013

Factor income in nominal terms

EU-27 106 100.0 105.2 109.0 109.8 110.6 110.1 109.9 110.9 EU-15 106 100.0 104.1 106.8 107.1 107.4 106.2 105.5 106.1 EU-10 96 100.0 106.5 114.3 117.1 122.9 124.8 127.0 128.5 EU-2 123 100.0 121.4 138.0 143.9 146.8 152.4 158.0 164.7

Labour input

EU-27 100 100.0 94.5 91.2 88.1 85.1 82.2 79.4 76.7 EU-15 104 100.0 96.2 94.0 91.8 89.7 87.7 85.6 83.7 EU-10 96 100.0 92.9 89.2 85.6 82.2 78.9 75.8 72.7 EU-2 99 100.0 93.1 88.4 84.0 79.8 75.8 72.0 68.4

Agricultural income in real terms per labour unit

EU-27 109 100.0 106.9 112.4 115.0 117.6 118.8 120.4 123.2 EU-15 105 100.0 104.5 107.6 108.4 109.1 108.5 108.2 109.3 EU-10 103 100.0 104.7 113.9 118.2 125.9 129.6 133.7 137.1 EU-2 127 100.0 125.2 146.9 158.1 166.4 178.3 190.8 205.1