Brussels, 05/02/2007 (Agence Europe) - On 5 February, the European Union published its projections for agricultural markets over the period 2006-2013, which present a “moderately positive” outlook for cereals and “relatively positive” prospects for animal products, particularly for poultry, pig meat and dairy products. In addition, the Commission projects a 23.2% growth in average EU27 agricultural income between 2005 and 2013 in real terms and per labour unit (compared with 12.8% in the EU25 in the February 2006 report, see EUROPE 9129). The report is based on the information available at the end of November 2006. Account is also taken of the 2005 reform of the sugar sector, but not of the potential outcome of trade negotiations within the framework of the Doha Development Round, which are still ongoing, nor of the impact of tightening the criteria on maize intervention.
Cereals: medium-term projections for cereals appear “moderately positive”, says the Commission, with the expected expansion of domestic consumption and cereal exports. The use of cereals within the EU is expected to rise slightly thanks to the new demand in bioethanol and biomass. At the same time, the demand for cereals for animal feed is likely to stagnate, then fall slightly, given the increasing use of protein feeds residues from biofuel production. Public stocks of cereals will probably disappear in most EU regions. The Commission acknowledges the problem of structural surpluses, in particular of maize in the landlocked countries of Hungary, Slovakia, Romania and Bulgaria. Public stocks of maize are likely to remain high in these regions, with 18 million tonnes in 2013.
The total area where cereals are cultivated will probably remain stable over the period: between 51 and 52 million hectares in the EU25 and around 59 million hectares with Romania and Bulgaria, despite differences in products. Areas given over to barley will continue to fall, unlike the areas given over to soft wheat and maize, which will increase slightly (the area given over to rye will probably remain stable). The Commission expects a slight increase in yield from cereal crops (0.7% between 2006 and 2013).
Between now and 2013, the cereals markets should remain reasonably balanced in most regions of the EU. The Commission expects 301 million tonnes of cereals to be produced in 2013, 15 million tonnes more than projections for 2007. This is particularly thanks to wheat, the production of which is expected to rise from 133 million tonnes to 146 million tonnes. Maize production should also rise from 60 to 65 million tonnes. The accession of Romania and Bulgaria in 2007 should also cause a 22 million tonne increase in European cereal production. Despite a “moderate” rise in domestic production, the EU will continue to be a net importer of rape.
Sugar: implementation of the reform of the sugar sector will last until 2009. The Commission expects medium-term sugar production to remain strong in France, Germany, the United Kingdom and Poland. There could be problems in the sector in the event of slow take-up of restructuring, as well as the high level of sugar stocks.
Animal products: medium-term prospects are “relatively good” for poultry pig meat and milk and dairy products. Beef meat production, however, is likely to continue to decline. Beef production is expected to increase in 2006, thanks to the full lifting of the EU ban on British beef. The Commission accepts that the poultry market will be affected by future development with regard to the bird flu epizootic in Europe. Total consumption of meat in the EU is projected to increase, from 85.3 kg/person in 2005 to 86.3 kg/person in 2013. Pork accounts for 50% of meat eaten, far ahead of poultry (27%).
Milk production is expected to bounce back over the short term (after a fall between 2005 and 2006), then to stabilise at around 149 million tonnes, before gradually declining. The EU27 dairy herd is projected to decline from 24.9 million beasts to 22.5 million in 2013. EU27 cheese production should see a 10% medium-term increase. Butter production is likely to increase in 2007, before resuming its decline over the medium term (given the fall in the intervention price and the rise in demand for higher value-added dairy products). Finally, the Commission expects a medium-term fall in the production of powdered skimmed milk.
Agricultural income: according to the Commission, the average EU27 agricultural income (in real terms and per labour unit) should rise by 23.2% between 2005 and 2013. There will, however, be marked differences between countries: an average 9.3% in the 15 older member states, 37.1% in the ten member states which joined the EU in May 2004, and 105.1% in the last two countries to join, Romania and Bulgaria. (lc)