JRC expertise in modelling has fed into the latest issue of the European Commission's agricultural outlook for the next decade. Compiled by the Directorate-General for Agriculture and Rural Development, it was presented at a dedicated conference in Brussels on 1-2 December 2015. Results show for instance that cereal prices should remain at a lower level than in the past ten years or that sugar prices will decrease as of 2017 following quota abolition. The dairy and some livestock sectors are expected to expand.
The publication describes the trends for major EU agricultural commodity markets such as arable crops, sugar, biofuels, dairy and meat markets until 2025. This annual outlook constitutes the main reference (baseline) scenario for any assessments of potential impacts to be carried out on agricultural policies. Findings show that in a context of lower energy and commodity prices, and after several consecutive years of record supply resulting in stock replenishment and an associated price decrease, EU cereals prices are expected to recover by the end of the outlook. This will be driven by a strong feed demand, which compensates a slower than expected increase of biofuels demand.
Sugar quota expiry as from 2017 should result in an EU sugar price getting closer to the world price and in an increased EU production. Affordable feed prices and a steady world demand will favour the development of livestock products. Despite the current difficulties of the milk market, the EU dairy sector should be in a position to further expand thanks to exports and further increase of domestic demand. Milk prices are projected to recover in the short-run to moderate levels before increasing further towards the end of the projection period. This supports an expansion of the EU production of milk and dairy products. Similarly, pig meat could benefit from stronger EU exports.
Uncertainty areas around policy, macroeconomic and agronomic assumptions are also analysed. This year's report includes for example an analysis of a persistent depreciation of the euro or a change in China's strategy when it comes to self-sufficiency in livestock production.
During the conference, JRC Director-General, Vladimir Šucha highlighted the possible tensions between achieving the following three objectives: food security, environmental protection and climate action. He emphasised the areas where further research is still needed, such as greenhouse gas emissions, land-use change (carbon leakage, biofuels), water pollution and availability, as well as possible impact on agricultural production of climate adaptation and mitigation.
JRC's core contribution is encompassed within the integrated Modelling Platform for Agroeconomic Commodity and Policy Analysis (iMAP). The JRC experts discussed the preliminary results of the projections with market and policy experts from all over the world at a JRC-organised workshop on 22-23 October 2015 in Brussels.