Prospects for EU-27 agricultural markets and income 2006-2013.
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Transcript of Prospects for EU-27 agricultural markets and income 2006-2013.
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
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
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 %)
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
Prospects for agricultural markets 2006-2013
Cereal, oilseed and sugar sectors
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.
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
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
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
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
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
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
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
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
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
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.
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
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.
Prospects for agricultural markets 2006-2013
Meat sector
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
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
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
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
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
Prospects for agricultural markets 2006-2013
Milk and dairy sector
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
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
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
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
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
The development of agricultural income
Prospects for agricultural markets and income 2004-2013
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