Brussels, 31/07/2007 (Agence Europe) - On 31 July, the European Commission published its forecast for agricultural markets 2007-2014, which suggests a favourable outlook for cereals and a relatively good one for animal-based products, particularly milk and dairy products, poultry and pig meat (see EUROPE 9359 for the previous report published in February). Beef production is expected to continue to fall as a consequence of the 2003 reform of the Common Agricultural Policy (CAP). The Commission also expects EU27 average agricultural income to rise by 21% in real terms and per labour unit between 2006 and 2014. There are likely to be wide disparities between countries: 9.9% in the 15 older member states, 24.9% in the 10 states which joined the EU in May 2004 and 71.8% in Bulgaria and Romania, the two latest member states. The statistical information used by the Commission in drawing up its report was gathered until the end of June 2007. They take account of the phasing-out of maize intervention, but not the outcome of the Doha Round trade negotiations, which are continuing.
Cereals: the medium-term projections for most cereals are “positive”, the Commission says, thanks to the expansion of domestic consumption and exports. The use in the EU of cereals is expected to rise slightly, thanks to increasing bioethanol and biomass demand. Public stocks of cereals could disappear in most regions of the EU and fall to only 11 million tonnes in 2014. The Commission welcomes the three-phase withdrawal of maize intervention, which should lead to surplus reductions in Hungary, Slovakia, Bulgaria and Romania. The Commission is expecting 300 million tonnes of cereals to be produced in 2014, 29 million tonnes more than expected in 2007, thanks especially to wheat, production of which should rise from 129 to 148 million tonnes.
Sugar: reform of the sector will continue until 2009. The Commission expects sugar production to remain firm in France, Germany, Poland and the United Kingdom. It does not rule out problems in this sector with the main risks being slow take-up of restructuring and the high level of stocks.
Animal products: medium-term perspectives are “relatively favourable” for poultry, pig meat and dairy products. However, beef production is expected to continue to decline.
Milk: in the short term, milk production is expected to rise slightly, but, in the medium term, it is expected to decline slightly (to 148.3 million tonnes in 2014). European cheese production is likely to see a 10% increase in the medium term. Butter production will continue to decline. The Commission is predicting a significant fall in the production of skilled milk powder. (lc)