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Prospects for EU-25 agricultural markets and income 2005-2012 Update December 2005

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2005-2012. Update December 2005. Prospects for agricultural markets and income 2005-2012, December 2005. 2 ... 21. EU to remain net importer of beef meat over ... – PowerPoint PPT presentation

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Title: Prospects for EU-25 agricultural markets and income 2005-2012 Update December 2005


1
Prospects for EU-25 agriculturalmarkets and
income2005-2012 Update December 2005
2
Structure of the presentation
  • Introduction
  • Analytical approach
  • Methodology
  • Main assumptions
  • Main results
  • Projections for cereals, oilseeds, meat, eggs and
    dairy
  • Income projections

3
Methodological approach
  • Type of models DG AGRI market projections
    carried out using two recursive dynamic partial
    equilibrium models
  • Results model output consists of supply balance
    sheets for main commodities, market prices and
    income
  • Detailed results for
  • Old Member States (EU-15)
  • New Member States (EU-N10)
  • EU-25
  • For main commodities/variables

4
Methodological approach
  • Main assumptions
  • Uruguay Round Agreement on Agriculture maintained
    constant
  • Favourable, though moderate world agricultural
    market outlook
  • Return to modest economic and population growth
  • / exchange rate to reach 1.15 by 2012
  • By 2012 direct payments are assumed to be 90
    decoupled (milk 100 , arable crops 93 , beef
    78 , sheep 73 )

5
Assumptions for / exchange rate and GDP growth
6
Prospects for agricultural markets
2005-2012Cereal and oilseed sectors
7
Crops
  • medium term perspective appear moderately
    positive for crop markets in line with
  • CAP reform and decoupling
  • the return to higher set-aside levels in 2005/06
  • favourable world market conditions and
  • the expected return to improved exchange rate
    conditions
  • short to medium term risk of regional imbalances
    due to lack of integration into the single
    market.

8
Slightly expanding cereal markets.
Development of cereal markets in the EU,
1995-2012 (mio t)
9
balanced by higher levels of set aside
Development of set aside in the European Union
(mio ha)
10
with moderate levels of stocks .
Development of stocks and cereal exports in the
EU, 1995-2012 (mio t)
11
and declining levels of maize and soft wheat
stocks over the short to medium term ..
Composition of public stocks in the EU (mio t),
1995-2012
12
Prospects remain conditional on exchangerate
environment asymmetric risks
Cereal stocks in the EU under different exchange
rate assumptions (mio t)
13
Good overall perspectives on soft wheat markets
with regional appearance of public stocks..
Development of soft wheat markets in the EU (mio
t), 1995-2012
14
further loss of competitiveness of barley and
accumulating public stocks in the short to medium
term,
Development of barley markets in the EU (mio t),
1995-2012
15
growing competitiveness of maize use after 2008
but short term segmentation of markets due to
high transport costs
Development of maize markets in the EU (mio t),
1995-2012
16
. short-term pressure on rye markets.
Development of rye markets in the EU (mio t),
1995-2012
17
good prices should raise incentives to produce
durum wheat.
Development of durum wheat markets in the EU (mio
t), 1995-2012
18
Moderate perspectives on oilseed markets
  • increase of area, mainly rapeseed
  • 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.

19
Prospects for agricultural markets
2005-2012Meat sector
20
Meat
  • Beef production lower than consumption in 2003
    for the first time in 20 years and expected to
    remain so throughout the projection period due
    to
  • Declining cattle herd from dairy sector
  • Impact of decoupling of direct payments
  • Impact of market disruptions of 2001 BSE crisis
  • Pig meat production expected to keep its slight
    growth thanks to
  • Solid demand both in the EU15 and in the new
    Member States
  • Expected profitability with good pig meat prices
    and relatively low feed prices
  • Poultry meat demand and production to remain
    strong
  • Limited recovery in sheep/goat meat production
    after 2001 FMD results in high market prices

21
EU to remain net importer of beef meat over the
medium term
EU production, consumption, trade and
intervention stocks (mio t c.w.e.)
22
Growth rates for pig meat production and
consumption are expected to be lower than in the
90s
EU production, consumption and trade (mio t
c.w.e.)
23
EU poultry production to keep its growth over the
medium term in line with growing consumption
EU production, consumption and trade (mio t
c.w.e.)
24
EU sheep/goat sector not to fully recover from
the 2001Foot and Mouth Disease
EU production, consumption and trade (mio t
c.w.e.)
25
Total EU meat consumption to resume its long term
growth
EU per capita consumption (kg/head, in carcass
weight equivalent)
26
Prospects for agricultural markets
2005-2012Milk and dairy sector
27
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 and
    market prices
  • Increasing use of milk for the production of
    cheeses and other high value-added dairy products
    for the domestic market limits availabilities for
    exports

28
Milk quotas to constrain EU milk production while
growing milk yields reduce dairy cow herd
EU milk production, deliveries to dairies, dairy
cows
29
EU cheese market keeps its steady growth over the
medium term
EU production, consumption and trade (mio t)
30
EU butter balance to improve over the medium term
EU production, consumption, trade and
intervention stocks (mio t)
31
EU Skimmed Milk Powder (SMP) market to shrink
over the medium term leaving less SMP available
for exports
EU production, consumption, trade and
intervention stocks (mio t)
32
Prospects for agricultural markets and income
2004-2012
  • The development of agricultural income

33
A moderately positive outlook for real farm
income in the old Member States.
34
with high income gains in the new Member States
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