Brussels, 08/12/2014 (Agence Europe) - At a seminar held in Brussels on Friday 5 December, officials from DG Agriculture and the European Commission presented the latest forecasts for the agricultural market for the next 10 years, which show that cereals prices will remain high, that demand for biofuels will decline and that sugar production will rise by 2% following the end of quotas in 2017.
The Commission anticipates cereals production of 317 million tonnes in 2024 and good export prospects, particularly for wheat. Despite a strong reconstitution of stocks of cereals in the EU in 2013 and 2014, rising demand will maintain the use of stocks below the average of the last decade, according to DG Agriculture. The surface area planted with arable crops in the EU is expected to fall off slightly (there will therefore be better yields) and movement is expected towards the increased production of corn and wheat, at the expense of other cereals. Cereals prices are expected to be around 180 euros/tonne on average, above historical averages (but less than the peak of 2010-2012).
For biofuels, progress towards achieving the objective of 10% of renewables in the energy mix will continue, but biofuels will contribute just 7% of liquid fuels for transport, the Commission estimates.
The anticipated increase in the production of sugar (+2% by 2024) and isoglucose (+3%) and the reduced use of sugar beet for ethanol will put pressure on sugar prices and it is “hard to see how the European sugar price could remain broadly above the average of 400 euros/tonne”, the Commission states.
European exports of meat (particularly pigmeat) are set to rise, thanks to increased demand, the Commission predicts. European production of meat is set to increase slightly to 45 million tonnes, particularly due to the expansion of poultry meat (+7% in 2024 compared to 2014, as opposed to +2% for the production of pigmeat).
The prospects for the milk and dairy products markets are good, in the Commission's view. The production of milk is expected to increase and prices should remain at around 350 euros/tonne. In 2024, supplies of milk could stand at 158 million tonnes, or 12 million more than in 2014. The Commission expects to see an increased concentration of production in regions with the lowest production costs and where farms and dairies have invested the most. Larger volumes are expected in northern Europe (Germany, France, the Netherlands, the United Kingdom, Ireland, Denmark and Poland). In these regions, however, environmental constraints will limit the increase of production, the Commission warns. Production is expected to fall in southern Europe (Spain, Italy, Greece and Portugal), in the northernmost countries (Finland and Sweden) and in the eastern countries which will struggle to face increased competition from Poland. Milk powder and cheeses will absorb most of the extra production of milk in the EU. The production of cheeses could stand at 11 million tonnes in 2024.
Lastly, agricultural income is expected to rise by 6% in the EU between 2014 and 2024, according to the Commission's estimates, but with major differences between the countries: +33% in the countries which joined the EU after 2004, drop in agricultural income in the 15 “old” countries of the EU. (LC)