January 15, 2014

EU food production to rise by 2023 due to export and biofuel demands

The EU has announced that food production in the region, including those of cheese, poultry and wheat, is expected to rise by 2023 due to demand for exports and the manufacturing of biofuels from grains, according to a Bloomberg report.

Annual grain output has showed a projected climb to 316.1 million tonnes in 2023 from 304.3 million tonnes in 2013. Meanwhile, total meat output reveals a rise to 45.5 million tonnes from 43.7 million tonnes last year, an EU report stated.

The report also said that the EU's grain, meat and dairy industries are expected to benefit from global demand, with the bloc producing 20% of the world's wheat and pork and accounting for 30% of global cheese exports, based on data from the United Nations' Food & Agriculture Organisation.

According to the European Commission, agricultural commodity prices are expected to stay firm over the medium term, supported by factors such as the growth in global food demand, the development of the biofuel sector and a low productivity growth.

Arable land area is expected to remain stable at 57.8 million hectares (142.8 million acres), with an increase for soft wheat, corn and rapeseed at the expense of barley and durum wheat. Soft-wheat planting may rise to 24 million hectares by 2023 from 23.3 million hectares in 2013.

Grain consumption is predicted to climb to 297.9 million tonnes in a decade from 279.8 million tonnes in 2013, led by a doubling in use of cereals to make fuel to 20.6 million tonnes from 10.1 million tonnes. EU grain exports have revealed an increase to 31.1 million tonnes from 27.4 million tonnes.

Farmers in the EU are projected to harvest 137.9 million tonnes of soft wheat in 2023 from 136 million tons in 2013, with exports rising to 19.9 million tonnes from 18 million tonnes. 
 
EU corn output may jump to 79.3 million tonnes from 64.5 million tonnes in 2013. The bloc will see an increase of rapeseed production at 23.4 million tonnes in 2023, compared to 20.5 million tonnes last year. 
  
"Corn production, in particular, will continue to grow due to the use of corn as a feedstock for the ethanol industry," the bloc said. 
 
Ethanol production may climb to 6.1 million tonnes from 3.4 million tonnes, while output of biodiesel is projected to rise to 12.2 million tonnes from 7.9 million tonnes. 
  
EU beef production is predicted to slip to 7.62 million tonnes from 7.72 million tonnes a decade earlier, while pork output is seen rising to 23.4 million tonnes from 22.3 million tonnes and poultry production to 13.6 million tonnes from 12.8 million tonnes. 
  
EU exports of pork may reach 2.29 million tonnes in 2023, an increase from 2.11 million tonnes last year. Outgoing shipments of poultry may increase to 1.45 million tonnes from 1.34 million tonnes, based on projections. 
 
According to the EU, Russia and China are expected to remain the main destinations for the bloc's pork exports with a projected increase of Chinese import demand. 
 
For poultry, dynamic import demand in the Middle East, especially Saudi Arabia, is expected to continue and help boost EU exports. 
 
Cow-milk output may rise to 157.3 million tonnes from 150.4 million tonnes, with most of the increase absorbed by cheese production, the European Commission said. Cheese production may climb to 10.7 million tonnes from 9.67 million tonnes, with exports advancing to 1.02 million tonnes from 806,000 tonnes in 2013. 
 
"It is expected that the cheese market will be buoyed by a dynamic world market and steady growth in domestic demand," the EU said. 
 
The FAO's index of dairy prices averaged 242.9 points in 2013, the highest ever which represents a rise from 95.6 points in 2003.