Farmgate prices face high supply pressure through 2015

All farmgate prices could stay under pressure from strong European production this year, according to latest forecasts.

The European Commission’s new short-term outlook says there will be no let up from the high supplies that have taken agricultural markets slump to multi-year lows.
The cereals harvest for the 2015-16 marketing year could hit 307m tonnes – 6% above average but 7% below last year’s record.

Crop areas will be down due to lower prices, though yields will return to normal levels.

See also: Edgy market produces grain price spikes

Oilseed production could fall 8.5% in 2015-16 compared with the previous year.
But the 32m tonne crop would still be the second best recorded season.
In the dairy sector, EU milk production this year is expected to rise about 1% – despite the pain of lower prices
.
This could be followed by another 1% increase in 2016.
Production in top dairy nations Germany, France and UK will be similar to last year or slightly higher – though 2014-15 was particularly strong.

EU beef output could rise 1.4% this year and another 0.6% in 2016.
This will be caused by more culling of dairy cows, as well as growing herds in countries such as Spain.
The resurgence of European pigmeat production will slow, as the crash in prices hits farmers.
Production in 2015 will be 3% higher on the year, followed by a 0.9% rise in 2016.
Growth in the EU flock last year could also see sheepmeat production in 2015 jump almost 2%.