Economic analysis and market forecasts

Prospects for agricultural markets and income 2006-2013

This publication provides a picture of the likely medium-term developments of agricultural markets, based on a certain number of assumptions and on the statistical information available in the beginning of June 2006. The report covers the market and income prospects for the period 2006-2013 within the EU for the following products: cereals, oilseeds, meat, eggs, milk and the main dairy products. This report does not take into account the potential outcome of the multilateral trade negotiations within the framework of the Doha Development Round (the Uruguay Round Agreement on Agriculture is assumed to remain unchanged).

The medium-term projections depict an outlook for the EU cereal markets that would appear moderately positive for most EU cereals thanks to the expansion of domestic consumption (growth in the livestock industries and the emerging bioethanol and biomass demand) and cereal exports. Despite these favourable general conditions, the further delayed integration of land locked new Member States into the single market owing to marketing inefficiencies is identified as a significant downward risk for regional cereal markets. Structural surpluses, particularly of maize, would weigh heavily on the Hungarian and Slovakian markets over the projection period.

The poultry and pig meat sector should also exhibit relatively favourable medium-term perspectives, while beef production is expected to decline with a widening of the trade deficit as a consequence of the CAP reform and strong competition from the world market. Total per capita meat consumption is projected to increase by 2.2 % altogether by the end of the forecast period. The EU-25 will continue to be a net exporter of poultry meat, though at a declining rate, and of pork. The market balance for the major dairy products is expected to improve over the medium term, with increasing cheese production and consumption, but lower availabilities of butter and SMP.

These market projections should lead to an 18 % growth in EU-25 agricultural income between 2005 and 2013 in real terms and per labour unit (11 % in the old Member States and a steady 42.5 % rise for the new Member States). If the overall outlook for EU agricultural markets and income over the next seven years appears relatively favourable, it clearly remains subject to some important uncertainties. The latter relate in particular to the outcome of the Doha Development Round of trade negotiations and to the risks linked to animal disease such as Avian Influenza, which could have far reaching implications for the future pattern of EU agricultural markets.

Published in July 2006

Full text [pdf, 2 MB]

Summary [pdf]

Tables:

Grains [pdf][xls]

Meat and eggs [pdf][xls]

Dairy [pdf][xls]

Income [pdf][xls]

Presentation [pdf, 250 KB][ppt, 420 KB]