The Short-term outlook is based on reflections of market experts within the Directorate General for Agriculture and Rural Development of the European Commission, using the latest data available. It is published three times per year (in late winter, early summer and early autumn).
Uncertainties and low non-agricultural commodity prices resulted in a stronger global economic slowdown in 2016 than expected; the situation is expected to improve in 2017.
Cereals and oilseeds are characterised by a combination of a global record production with weak EU production, particularly for wheat and maize. Ample global supply results in low cereal prices for the coming year, but oilseed prices hold due to increased world demand for meals. The last year of EU sugar production under quota is expected below 17 million tonnes, enough to assure availability on the market in the short term but putting pressure on the level of EU stocks at the end of campaign.
EU milk supply growth slowed down and EU milk deliveries are expected below last year in the second half of 2016. Supported by sustained demand (domestic and worldwide), all dairy product prices are recovering. The milk price paid to farmers, still very low, is expected to increase in the autumn. A surge in pigmeat exports to China allows for a recovery in EU price. By contrast, ample poultry supply pushes EU prices down. Continued good beef exports limit EU price decreases despite abundant slaughterings of dairy cows. Sheep meat production is increasing, despite lower prices.
This report is prepared for the EU-28, under constant policy assumptions, with the Russian import ban assumed to be in place until end 2017.
Highlights
- The reduction in EU milk supply supports price recovery.
- World grain bumper crop, in spite of a lower EU cereal harvest, pressures grains prices.
- A second year of global sugar production deficit increases sugar prices.
- EU meat production and exports: toward a record year.
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