2024 Prospects for EU Agricultural Markets

Conference:
2024 Prospects for
EU Agricultural
Markets
Brussels,
5 December 2014
Pierluigi Londero
DG Agriculture and Rural Development
European Commission
Outline
• Policy assumptions
• Market outlook
•
•
•
•
Arable crops
Biofuels
Meat
Dairy
• Income developments
2
Policy assumptions
• CAP 2013 as far as possible
• Voluntary coupled support
• Greening:
- Permanent pasture kept constant,
- Limited effect of ecological focus area (EFA) & crop diversification at EU
aggregated level
• Trade agreements only if ratified:
• Concessions to UKRAINE included
• FTA with CANADA not included
• Russian import ban assumed to remain 1 year
3
Prospects for cereals, oilseeds, sugar and biofuels
•
Cereals and oilseeds
•
•
•
•
Sugar and isoglucose
•
•
•
•
Solid world demand leading to large EU exports of cereals
EU demand driven by feed use and biofuel use
Prices below 2012 record prices but above historical averages
Abolition of the quotas end of 2017 leading to EU sugar prices at world level,
more sugar produced domestically and lower imports,
a higher share of isoglucose use in Europe.
Biofuels
•
•
Lower growth of first generation biofuels than previously expected
Biofuels to contribute for 7% toward meeting the 10% target of renewables in
transport fuel
4
Million t
EU cereal market developments
180
160
140
120
100
80
60
40
20
0
2010-14
2024
Total Wheat
2010-14
2024
Maize
Food and industrial use
2010-14
2024
2010-14
Barley
Feed use
5
Bioenergy use
2024
Other cereals
Exports
Annual changes in area and yields
2024 vs. 2010-14
Annual change in yield between
2010-2014 and 2024
1.5%
Maize
13.3%
1.0%
Rice
0.6%
0.5%
Sunflower seed
0.8%
Oats
3.8%
Durum wheat
3.6%
Sugar beet
2.3%
Other cereals
6.3%
0.0%
-1.5%
Barley
17.4%
Soybeans, 0.7%
Common wheat
33.3%
Rapeseed
9.5%
Rye
3.5%
-0.5%
0.5%
Annual change in area harvested between 2010-2014 and 2024
Note: the bubble size refers to the average share in area in the years 2009-13
6
1.5%
Uncertainties surrounding EU
maize price developments
EUR/t
260
240
220
260
90th percentile
240
220
200
200
180
180
160
160
140
140
120
10th percentile
7
2023
2021
2019
2017
2015
2013
2011
Intervention price
2009
Barley
80
2007
Maize
Possible price range as a
result of yield and
macroeconomic
variability
2005
Wheat
2023
2021
2019
2017
2015
2013
100
2011
80
2009
120
2007
100
2005
EUR/t
EU cereal producer prices above
historical averages
over the medium term
Note: Uncertainty analysis prepared by JRC-IPTS, based on
partial stochastic analysis
10
• A lower biofuel use expected
because:
In recent years, only slow increase in
biofuel uptake
-
Lack of strong policy incentives to invest
-5
• Stable biodiesel production from
domestic oilseeds
• Early increase in maize-based
ethanol
Ethanol (1st gen)
Ethanol net imports
Biodiesel (waste)
Biodiesel net imports
8
Ethanol (2nd gen)
Biodiesel (1st gen)
Biodiesel (2nd gen)
2023
-
0
2021
Decreasing trend in transport fuel use
2005
-
5
2019
Share of double counted 2nd-generation
biofuels (including from waste oils) to grow
2017
-
2015
Biofuels to contribute to 7% of liquid
transport fuels by 2020
2013
-
15
2011
Renewable Energy Directive (RED) target of
10% of renewables in energy share by
2020
2009
-
20
2007
• Assumptions:
Million t.o.e.
Biofuel use to expand in the EU
but less dynamically than expected
A changing sweeteners EU market environment
50
400
40
300
30
200
20
100
10
9
2023
0
2021
0
2019
• Isoglucose use to increase
significantly to about 12% of
sweetener use
500
2017
• Less sugar imports
60
2015
Ethanol production from sugar beet to
decrease
600
2013
-
70
2011
Channelled in sugar production
700
2009
-
Sugar beet,
EUR/t
80
2007
• An increase in sugar beet
production
Sugar,
EUR/t
800
2005
• EU sugar price getting closer to
world prices at around 400
EUR/t
EU white sugar
World white sugar
Sugar beet
Out of quota sugar beet
Prospects for meat
•
Good exports prospects
•
•
•
•
An increase in EU meat production
•
•
•
•
for pig meat and poultry,
driven by a steady growing world consumption,
supporting firm or even increasing world and EU prices.
driven by a sustained increase in poultry meat production and lower feed costs,
while, after a recovery in the short-run, beef production should decline at a slow
pace
and pig meat production should stabilise.
An EU per capita meat consumption on a declining trend
•
•
•
after a recovery in the short-run,
back to declining consumption
except for poultry benefitting from a lower price and a good image close to
consumers
10
70
Economic crises
68
66
64
62
BSE
and
FMD
Low meat supply
(new welfare rules
for pig meat, cow
herd dev.)
60
Highest ever beef
imports from South
America
58
Recovery of pig
meat prod.
and more beef from
dairy herd
56
11
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
54
2000
kg per capita in retail weight
A slowly declining EU meat consumption
1000 t
Change in EU meat production and consumption
2024 compared to 2014
1 000
Production
Consumption
800
600
400
200
0
-200
Beef
Pig meat
Poultry meat
12
Sheep meat
1000 t
EU pig meat export developments
3 000
Total
Russia
Ukraine
China and Hong Kong
Japan
S. Korea
2 500
2 000
1 500
1 000
500
0
2005
2010
2013
13
2014e
2024f
Other
Prospects for milk and dairy products
•
Milk remains the white gold for the next decade
•
•
•
•
EU deliveries to increase by 12 Mt in 10 years
•
•
•
•
despite the difficult current market situation,
because world demand is steadily growing,
prices to stay firm around 350 EUR/t.
Further concentration of milk production in regions with lower production costs
EU production expansion limited by increasing competition on the world market
and by the small potential for higher EU consumption
Environmental constraints to play a major role.
More milk channelled into cheese and powders
•
•
•
Cheese domestic use to continue growing and more exports
More SMP for the export market thanks to additional drying capacities
Whey powder exports getting always higher
14
Steady growth in world consumption
Cumulative change in world trade of dairy products
million tonnes of milk equivalent
• +2.1% per year in world imports
• A slightly lower increase in traded
volumes compared to the last
decade
• But most of the extra demand to
be supplied by the EU
-
NZ production and exports limited by
natural constraints
US dom. consumption to grow faster
• China to contribute less to the
extra demand
-
Africa and other Asian countries to absorb
more dairy products
16
Exports
16
14
12
14
Arg.
US
10
12
8
NZ
6
8
4
NZ
EU
EU
Arg.
-2
Africa
MLE
O.
Asia
China
2
0
MLE
China
Russia
Russia
2014 vs
2004
2024 vs
2014
-2
2014 vs
2004
15
O.
Asia
6
2
0
Africa
10
US
4
Imports
2024 vs
2014
16
2024
2023
2022
2021
2020
2019
2018
2017
Quota*
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
Million t
Higher milk collection in the EU
180
160
Milk production
Milk deliveries
140
120
100
Concentration of milk production in the Northern
part of the EU
Enviro
nment
Stable or low
quantity increase
elsewhere
Increase in MS
where lower prod.
costs and
investments
DE, FR, PL, NL, UK,
IE, DK
17
2024 vs 2014, in million tonnes of milk eq.
Most of the extra milk channelled into cheese
7
6
5
Expected increase in domestic use
4
3
2
1
0
Prod.
Exp.
Cheese
Prod.
Exp.
Butter
Prod.
Exp.
Whey
Prod.
Exp.
SMP
18
Prod.
WMP
Exp.
Prod.
Exp.
Fresh dairy p.
A slight increase in real income/AWU
in 2024 compared to 2012-14
Value of
production
-10%
Total costs
Subsidies
-6%
-21%
Real factor
income
-23%
Total labour
-28%
Income / AWU
+9%
19
Summary
•
Arable crops and biofuels
•
•
•
•
Meat
•
•
•
•
Cereal prices below 2012 record prices but above historical averages
Less biofuel demand than previously anticipated
Abolition of the sugar quotas leading to EU sugar prices at world level
Good export prospects for pig meat and poultry, driven by world demand
A small increase in meat production thanks to poultry
Meat consumption oriented downwards, except for poultry
Dairy
•
•
•
The dairy sector remains the 'white gold' despite the current market difficulties
An increase in the EU milk production driven by the steady increasing world
demand and further increases in domestic use
Most of the additional milk to be channelled in cheese, whey powder and SMP
20
Report and data available at:
http://ec.europa.eu/agriculture/markets-and-prices/medium-term-outlook/index_en.htm
DISCLAIMER: While all efforts are made to reach robust market and income prospects, uncertainties
remain. This publication does not necessarily reflect the official opinion of the European Commission.
© European Union, 2014 - Reproduction authorized provided the source is acknowledged
21

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