Selected Preliminary Results of the Baseline 2015

Transcription

1 Selected Preliminary Results of the Baseline 2015 Dairy Roel Jongeneel Petra Salamon, Myrna van Leeuwen, David Verhoog, Trevor Donnellan, Mariusz Hamulczuk, Kevin Hanrahan, Lauri Kettunen, Fabrice Levert AGMEMOD Partnership Zagreb, February 25-26th 2015

2 Important to remember Data built up from MS. Roughly okay till 2012, but not exactly mirroring 2013, 2014 actually observed data. Has implication for number comparisons over time Focus is on specific group of MS for which data and behavioural equations have been updated For other MS data updates (but not complete) and some further adjustments 2

3 Selected highlights Medium run perspective of dairy is good despite short-run pressure on dairy product prices EU milk production projected to increase by more than 10 Mt (is likely to be conservative estimate) After QA the EU s reliance on export markets will significantly increase (i.p. cheese, but also butter?) The EU is competitive in cheese and smp, less so in other products (but whey?) 3

4 Topics Introduction Milk production at EU level Results for selected MS Domestic use Trade & competitiveness Concluding remarks 4

5 Introduction What has been done? Extensive database update (but still not complete) Adjustment/recalibration of behavioural equations (fully done for selected MS) Final scope EU-28, but focus on selected EU MS (De, Fi, Ire, Nl, Pl, beh+data; other MS data) Miscellaneous Whey market preparation (mainly infrastruct.) No R-factors applied (but structure in place) 5

6 Introduction Policy issues (CAP reform,...) Greening (EFA) not relevant for dairy... but Voluntary Coupling (all but De) 19 MS apply coupled payments to dairy (24 MS beef) solution chosen to cope with still lacking precise information => use existing measures Milk supply increase might be a bit underestimated due to ignoring vol.coupling 6

7 Introduction Real price dip in 2015 is likely to differ from OECD s Agricultural Outlook projection 2014 State of world market ( /100kg) Note: declining prices in 14-15, recovery in 16 Cheese is going to diverge from other dairy prods? 7

8 Million ton Milk production at EU-level % change Past data Projected data EU-28 milk production increase of 10.8 mill.t (+8%) 10 yr) Average prod growth 0.8% p.a.(mostly N-Eur/old MS) Dairy cow stock will continue to gradually decline 8

9 Million ton Evolution of EU milk production % increase Past data Projected data No extraordinary growth rates needed to increase the EU s milk supply to 168 million tons Note: more insight needed into evolution of farming systems (grass-based, factory farming) and structural change welcome (e.g. experiences outside EU) 9

10 Changes in milk production ton Increases in Irl (+37%), Nl (+13%), Pol (+8%), Germ (+10%) Decline in Finland (-4%) 11

11 Milk supply expansion (%) % increase due to quota abolition Irl. largest expected increase due to QA; NL corrected for env. constr.; decline for Fi expected; Fra and Germ both increase 12

12 Milk yield evolution Kg/dairy cow Past data Projected data Increase in milk yield/cow in EU-28 in coming decade is on average 1.1% p.a. Milk yield increase slows down over time (incr. grass-based?) 13

13 x1000 dairy cows Expected dairy cow stock evolution Past data Projected data Dairy cow stock will continue to gradually decline after a temporary increase in period Dairy cow stock adjustments: new architecture explaining milk supply 14

14 Dairy cow stock evolution selected MS Index =100 Projected data x1000 dairy cows Irish and German cow stocks increase; others decline Q: what explains decline in dairy cow numbers? 15

15 /kg milk Cost of production (cost index) (Adjusted) dairy input costs ( /kg milk) vary between MS and tend to increase over time (reflecting feed costs) Analysis of production costs needs more refinement in order to properly estimate future milk supply responsiveness 16

16 x1000 tons Domestic use (product weight) Past data Projected data Demand growth is limited but positive, especially for cheese, fresh dairy products, with butter use declining over time 17

17 Trade: net exports EU ton Supply increase creates stronger reliance on export markets Cheese exports are leading in EU s dairy exports Will the EU become an increasing fat exporter...? (butter) 18

18 Trade: cheese 1000 ton % change After QA EU s cheese exports will increase to a structurally higher level than in the Milk Quota-era 19

19 Euro/100kg Trade: price competitiveness Past data Projected data The EU is/has become competitive in cheese, but differences exist between member states 20

20 Euro/100kg Trade: price competitiveness Past data Projected data The EU is competitive in SMP 21

21 Euro/100kg Trade: price competitiveness Past data Projected data The EU is not competitive in butter although its position improved When there is a need to export butter this might create some pressure on EU milk price 22

22 Euro/100kg Trade: price competitiveness Past data Projected data The EU is not competitive in WMP and is not likely to become so in the future 23

23 How do our results compare to others? EU Commission outlook EU milk production Mt (2024) (168.5 Mt) Dairy cow stock 22.1M dairy cows (2024) (22.8M) Cheese prod up (14-24) by 11.5Mt (10Mt) (milk equiv) Trade (indicative) We export more cheese and butter We export less SMP and much less WMP 24

24 How do our results compare to others? OECD-FAO Agr. Outlook EU milk production MT (2023) (166.7Mt) Dairy products OECD-FAO AGMEMOD product level 2013 growth rate level 2013 growth rate Butter 2, , Cheese 10, , Smp 1, , Wmp Note: our EU-totals are still rather preliminary. We use within model predictions (2014 not adjusted to actual observation, no R-factors applied) 25

25 Concluding remarks General medium term prospect for the dairy sector is still good Projected milk supply increase is (2023), which is +3.8% as compared to OECD-FAO EU s dairy sector will become more reliant to on the world: might create additional pressure on prices than is currently foreseen EU dairy products markets are satiated but still can accommodate some consumption increase (especially in some NMS) 26

26 Concluding remarks Qualifier: Note that refined analysis focused on Germ, Finl., Irl., Neth., Poland (for other MS still more work needs to be done): take our total EU-28 estimates with due care!! Impact of CAP reform (i.p. voluntary coupling) has not yet been adequately taken into account 27