Prospects for EU-27 agricultural markets and income 2007-2014.
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Transcript of Prospects for EU-27 agricultural markets and income 2007-2014.
Prospects for EU-27 agricultural
markets and income
2007-2014
Prospects for agricultural markets and income 2007-2014, July 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 2007-2014, July 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 2007-2014, July 2007 4
Methodological approach
Main assumptions: – Uruguay Round Agreement on Agriculture
maintained constant – Favourable, though positive world agricultural
market outlook– Return to modest economic growth – $/€ exchange rate to reach 1.15 by 2014– By 2014 direct payments are assumed to be
91% decoupled (milk 100 %, arable crops 96 %, beef 79 %, sheep 82 %)
Prospects for agricultural markets and income 2007-2014, July 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 2014
0
1.5
3
4.5
6
7.5
GDP growth
$/euro exchange rate
GDP growth$/euro exchange rate
Prospects for agricultural markets 2007-2014
Cereal, oilseed and sugar sectors
Prospects for agricultural markets and income 2007-2014, July 2007 7
Crops medium term perspective appears positive for cereal markets
in line with: – CAP reform, decoupling and phasing out of maize
intervention;– two consecutive low harvest in the EU in 2006 and 2007
causing a significant decline in stocks; – improving domestic use (emerging biofuel industry and
feed); – favourable world market conditions and– the expected return to improved exchange rate conditions– removing regional imbalances of maize markets – medium-term risks of regional imbalances for barley
(Germany) and soft wheat (new Member States).
Prospects for agricultural markets and income 2007-2014, July 2007 8
Slightly expanding cereal markets and emerging bioethanol markets….
Development of cereal markets in the EU, 1995-2014 (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 2014
production
non-feed use
feed use exports
imports
EU-15 EU-25 EU-27bioethanol
Prospects for agricultural markets and income 2007-2014, July 2007 9
… lead to a return to modest levels of stocks on EU cereal markets ….
Development of stocks and cereal exports in the EU, 1995-2014 (mio t)
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 2014
private stocks
public stocks
exports
EU-15 EU-25 EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 10
…and change in the composition of public stocks …
Composition of public stocks in the EU (mio t), 1995-2014
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 2014
wheat barley rye maize
EU-15 EU-25 EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 11
… with more evenly spread public stocks across regions. Regional distribution of public stocks in the EU (mio t), 1995-2014
0
5
10
15
20
25
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
EU-15 EU-25 EU-27
EU-15 EU-10 EU-2
Prospects for agricultural markets and income 2007-2014, July 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), 1995-2014
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 2014
EU-15 EU-25
production
non-feed use
feed use exportsimports
public stocks
EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 13
…further stabilisation of barley production and loss of regional competitiveness in feed use,
Development of barley markets in the EU (mio t), 1995-2014
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 2014
feed use
non-feed use
production
exportspublic stocks
EU-15 EU-25 EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 14
…growing competitiveness of maize use after 2007 assures fluidity of maize markets in the EU…
Development of maize markets in the EU (mio t), 1995-2014
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 2014
production
feed use
non-feed use
imports
exports
EU-15 EU-25
public stocks
EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 15
.. very positive prospects on rye markets with firm prices over the medium term…….
Development of rye markets in the EU (mio t), 1995-2014
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 2014
production
non-feed use
feed use
public stocks
exportsimports
EU-15 EU-25 EU-27
Prospects for agricultural markets and income 2007-2014, July 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 2014
production
domestic use
imports
Exports
EU-15 EU-25 EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 17
Cereal prices should stay firm over the medium term.
80
90
100
110
120
130
140
150
160
170
180
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
EU
R/t
maize EU-15
maize HU
feed barley
soft wheat
rye
Development in cereal prices in the EU (EUR/t), 1991-2014
Prospects for agricultural markets and income 2007-2014, July 2007 18
Positive perspectives on oilseed markets increase of yield and area (0.4 mio ha mainly
rapeseed) increase production (+8.4 mio t) to34.6 mio t in 2014 (vs. domestic demand of 67 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 2007-2014, July 2007 19
Sugar markets: Large gains in competitiveness to be reached over the medium term……
Development of sugar markets in the EU (mio t), 2002-2014
0
5
10
15
20
25
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
EU-15 EU-25
production
Food and industrial use
exports imports
total stocks
EU-27bioethanol
intervention stocks
Prospects for agricultural markets and income 2007-2014, July 2007 20
…..with downside and upside risks.
Downside risk factors dominate the short to medium term…..– slow uptake of restructuring and– high levels of stocks, despite temporary withdrawal of quota in
2007– 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 2007-2014
Meat sector
Prospects for agricultural markets and income 2007-2014, July 2007 22
Meat Beef production to continue falling below consumption throughout
the projection period due to:– Declining cattle herd from dairy sector– Impact of decoupling of direct payments
Pig meat production expected to keep its slight growth thanks to:– Solid demand both in the EU-15 and in the EU-12– Exports to decline slightly due to greater competition from low cost
exporters, imports to remain at low level
Poultry meat demand to grow faster than production, leading to gradually declining exports
EU sheep/goat meat production to continue its declining trend
Prospects for agricultural markets and income 2007-2014, July 2007 23
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
tock
sProduction
Exports ImportsEnding stocks
EU-15 EU-25EU-12
Consumption
EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 24
Growth rates for pig meat production and consumption are expected to be lower than in the 90sEU 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 2007-2014, July 2007 25
EU poultry consumption to grow at a faster rate than production over the medium termEU 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 2007-2014, July 2007 26
The decline in EU sheep and goat production is to continue over the forecast periodEU 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 2007-2014
Milk and dairy sector
Prospects for agricultural markets and income 2007-2014, July 2007 28
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
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 2007-2014, July 2007 29
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 c
ow
s (
mio
he
ad
s)
Milk Production
Dairy cow herd
Milk Deliveries
EU-12 EU-15 EU-27EU-25
EU-15
EU-N10
EU-N2
EU-12
Prospects for agricultural markets and income 2007-2014, July 2007 30
EU cheese market keeps its steady growth over the medium term (+10%, 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 2007-2014, July 2007 31
Balance of EU butter market to improve with production and consumption to decline by 6 % and 1%
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
tock
s
Consumption
Production
Stocks
ExportsImports
EU-15 EU-25EU-12 EU-27
Prospects for agricultural markets and income 2007-2014, July 2007 32
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
tock
s
Consumption
Production
Imports
Exports
Stocks
EU-15 EU-25EU-12 EU-27
The development of agricultural income
Prospects for agricultural markets and income 2007-2014
Prospects for agricultural markets and income 2007-2014, July 2007 34
Favourable medium-term perspectives for farm income, most notably in the EU-12
2005 2006 2008 2009 2010 2011 2012 2013 2014
Factor income in nominal terms
EU-27 96.0 100.0 102.2 103.4 103.4 104.5 105.9 107.6 109.7 EU-15 96.9 100.0 100.0 100.8 100.5 101.6 103.1 104.7 106.8 EU-10 93.2 100.0 113.6 117.2 120.3 119.8 118.2 118.4 119.8 EU-2 87.1 100.0 118.2 121.4 121.4 124.7 130.7 135.9 138.2
Labour input
EU-27 102.7 100.0 93.5 90.4 87.4 84.6 81.8 79.2 76.6 EU-15 101.9 100.0 95.5 93.3 91.1 89.0 87.0 85.0 83.0 EU-10 102.8 100.0 93.1 89.9 86.7 83.7 80.8 77.9 75.2 EU-2 103.9 100.0 90.3 85.7 81.5 77.4 73.5 69.8 66.3
Agricultural income in real terms per labour unit
EU-27 95.4 100.0 104.6 107.2 108.6 111.1 114.1 117.3 121.0 EU-15 96.9 100.0 100.5 101.7 101.8 103.3 105.3 107.3 109.9 EU-10 92.9 100.0 114.5 118.8 122.6 122.8 121.9 122.7 124.9 EU-2 86.1 100.0 124.6 131.8 135.8 143.2 154.1 164.6 171.8