EU projecting strong short term growth for agriculture
This week has seen the EU Commission go on the record, regarding the prospects for farming over the coming months
Where cereals are concerned, the good 2013 harvest (+8.3% with respect to 2012) should allow for a recovery in stocks by the end of the 2013/14 marketing year; yet stocks are expected to remain below average as EU exports could reach a record level, exceeding 37 million tonnes. Early estimates for 2014 sowings indicate a slight increase in cereal area (+0.8%), mainly due to soft wheat (+2.8%).
Following two successive years of contracted beef and pork domestic supply and demand, EU meat production and consumption is expected to recover in 2014. Some re-building of the dairy herd should lead to higher beef meat supply, while increased productivity in the pig meat sector could allow production to recover, following the strong decline in the sow herd observed in 2012 and 2013 linked to the implementation of the new EU welfare rules for sows.
High milk prices, induced by strong global demand, have triggered a significant rebound in milk production in the second half of 2013, more than offsetting the decrease of the first months of the year. The number of EU dairy cows increased significantly in 2013, thus leading to expectations that milk collection should increase in both 2014 and 2015. Although no significant surge in milk production is expected after the quota system is abolished, higher milk availability should allow for significant export opportunities in world markets, in particular for milk powders and cheese.
Meanwhile, the Commission has also confirmed that the period between the beginning of January and mid-February was the wettest in almost forty years, – particularly in Western Europe – with repeated periods of continuous rainfall. Some agricultural areas were flooded and many others were waterlogged. Similar conditions occurred – to a lesser extent – in some regions in southern and western France. The Iberian Peninsula was also subjected to high rainfall, especially the first half of February.
The impacts of the flooding and waterlogged conditions on crop and pasture production are difficult to judge at this time. Normally, during winter time, pastures and crops can withstand prolonged periods of waterlogged or ponded conditions, but this year’s rains are exceptional and temperature conditions are unusually mild in many of the affected areas. This implies that soil oxygen is relatively rapidly consumed by roots and microbial activity leading to root asphyxia. Depending on local conditions, the effects can vary from a slight impact on growth which can be compensated once conditions improve, to total crop loss and areas that have to be completely re-sown