September 12, 2009

France agriculture sector in crisis

French farmers have to face the consequences of the world crisis after a 11-percent drop of agricultural income in real terms in 2008, following two years of exceptional growth.

Nearly all sectors are marked by social or economic tensions due to lower prices and high production costs. Mergers and acquisitions are frequent in the agricultural industry, though the 2009 grain harvest is expected to reach a good 69.6 million tonnes, up seven percent above the average of 2004-08.

The community dairy cow herd decreased this year because of declining milk price. The net production of young bulls may stay close to the 2008 level due to the growth of the nursing livestock and the supply of crossbreed calves from the calves for slaughter production.

The net production of oxen is expected to continue decreasing due to a supply-demand imbalance resulting from projected low European consumption. Therefore meat prices may be lower, especially during the first semester.

In France, the production may increase one to two percent because of the rise of cows and young bulls slaughtering. This could include a reduction of meat prices while the prices of grazing males should rise due to the resumption of exports.

Poultry production declined year-on-year in the first semester of 2009, with broiler slaughter falling 4.4 percent and table egg decreasing five percent. Broiler consumption also declined 1.6 percent during the second trimester of 2009.

French poultry extra-EU exports jumped in 2008 due to strong demand in the Middle East, Russia and sub-Saharan Africa. Shipments to the EU, however, remained on a downward trend. At the same time, imports continued to rise steadily.

The French pig producers also observe a decrease of price with an average price at EUR1.189/kg at Plérin during the seven first months of 2009 instead of EUR1.236/kg for the same period of 2008, down 3.8 percent.