Prospects for agricultural markets and income 2005-2012
This publication provides a picture of the likely developments of agricultural markets up to 2012, based on a certain number of assumptions and on the statistical information available in May 2005.
The report contains two chapters. Chapter I centres on the market and income prospects for the 2005-2012 period within the EU and covers the following products: cereals, oilseeds, meat, eggs, milk and the main dairy products. Chapter II is dedicated to a presentation of the medium and long-term prospects of agricultural world markets, based on reports and projections established by various international organisations and institutes.
According to the report, the medium-term perspectives for the EU cereals, meat and dairy markets appear relatively favourable. The build-up of high levels of stock in 2004 is expected to continue to leave the cereal markets in a fragile situation over the next two years. The impact of the mandatory set-aside, the implementation of decoupling and moderate prospects for yield growth would combine to limit production growth over the medium term. This would generate a gradual fall in stock levels supported by further, though moderate, gains on the feed market and by more favourable conditions on world markets (and the assumed return to a slightly weaker euro) which would stimulate EU export opportunities. This relatively positive picture for the overall balance of the EU cereals market does not however prejudge the specific difficulties that could arise for coarse grains, in particular for barley, and on a regional scope for soft wheat and maize (linked to the situation of the landlocked new member States of central Europe which may still be faced with infrastructure difficulties over the short to medium term).
The EU meat markets have returned to a more normal situation after the extreme market conditions of the past few years. The current situation in the beef market - where consumption is higher than domestic production - is expected to persist over the 2005-2012 period. Pig and poultry production and consumption are expected to keep growing over the medium term, though at a slower pace than in the past decade, with increased trade flows between the new and old Member States. The EU dairy sector is foreseen to display a decline in the production of butter and SMP over the medium term as more milk is used for the production of cheese and other high value-added dairy products. The overall increase in domestic milk demand in the form of dairy products should result in lower butter and SMP exports and a limited increase in cheese exports. These medium-term projections should lead to a 11.7 % growth in EU-25 agricultural income between 2004 and 2012 in real terms and per labour unit (4 % in the old member States and a steady 50.4 % rise for the new Member States -i.e. +137 % against 2003 before enlargement).
These perspectives for EU agriculture should benefit from a steady increase in world food demand and a moderate growth in agricultural commodities trade driven by a supportive economic environment, higher population, urbanisation and changes in dietary pattern, particularly in many emerging economies.
Published in July 2005
Full text [pdf, 5 MB!]
Executive summary [pdf]
Chapter I [pdf]
Chapter II [pdf]
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