24
The 2016 EU Agricultural Outlook Conference Cereals, oilseeds, protein crops, biofuels Brussels, 6-7 December
The 2016 EU Agricultural Outlook
Conference
Cereals, oilseeds, protein crops, biofuels
Brussels, 6-7 December
2
EU biofuel demand: policy aspects
0%
1%
2%
3%
4%
5%
6%
7%
Energ
y s
hare
in t
ransport
energ
y
RED accounted Food feed biofuel
• Policy driven demand
• 10% of renewables in transport energy by 2020
• Preference for advanced biofuels, including UCO and other residues
• 7% cap on food and feed based biofuels
• Post-2020
• Outlook assumption is status quo
• Stronger focus on advanced biofuels
• Other renewable energy sources
• Limit on food and feed based biofuels
3
EU biofuel demand: policy aspects
0%
1%
2%
3%
4%
5%
6%
7%
Energ
y s
hare
in t
ransport
energ
y
RED accounted Food feed biofuel
RED2 limit
0%
1%
2%
3%
4%
5%
6%
7%
8%
Vo
lum
e sh
are
in p
etro
l/d
iese
l
Biodiesel Ethanol
B7
E5
4
EU biofuel demand: market aspects
0
20
40
60
80
100
0
50
100
150
200
250
USD
/barr
el
Billion litre
s
EU Diesel use EU Petrol use
Oil price (right axis)
• Overall road transport energy use going down
• Oil price
• Energy efficiency regulation
• Member State initiatives
• Biofuel demand
• Increased biofuel competitiveness
• Lower overall liquid transport energy effect on share based targets
Source: DG CLIMA reference scenario (POLES)
5
0
2
4
6
8
10
12
14
16
Advanced
Other sources
Wheat
Other cereals
(mainlymaize)
Sugar Beet0
2
4
6
8
10
12
14
16
Advancedbiofuels
waste oils
Imported palmoil
Imported oilseedoils
EU vegetable oilsfrom importedoilseeds
EU vegetable oilsfrom EU-grownoilseeds
Feedstock use for EU biofuel production
Biodiesel (billion litres) Bioethanol (billion litres)
The 2016 EU Agricultural Outlook
Conference
Cereals, oilseeds and protein crops
Brussels, 6-7 December
7
Extraordinary production recovery…
• Cereals and oilseeds: 3 years of worldwide beneficial agroclimatic conditions
0%
5%
10%
15%
20%
25%
30%
0
100
200
300
400
500
600
12/13 13/14 14/15 15/16est
16/17f'cast
million t
World stock levels and stock-to-use
wheat maize soybean Grains S-to-U
Source: IGC monthly report, 24/11/2016
0
50
100
150
200
250
300
350
Grains & Oilseeds price index
Source: IGC, 28/11/2016 (January 2000=100)
8
Production drivers
Area
• Competition from other uses
• Crop allocation: drive towards specialisation and scale economies
9
In the past: shift towards major crops Annual area and yield change between 2006 and 2016
Maize
Other cereals
Barley
Oats
Rice
Rapeseed
Rye
Sugar beet Sunflower
Durum
wheat Common
wheat
-1
-0,5
0
0,5
1
1,5
2
2,5
3
-3 -1 1 3
An
nu
al
yie
ld g
ro
wth
(%
)
Annual area growth (%)
10
In the future: further concentration Annual area and yield change between 2016 and 2026
Maize
Other cereals
Rapeseed
Sunflower Common
wheat
Barley
-1
-0,5
0
0,5
1
1,5
2
2,5
3
-3 -1 1 3
An
nu
al
yie
ld g
ro
wth
(%
)
Annual area growth (%)
Maize
Other cereals
Barley
Oats
Rice
Rapeseed
Rye
Sugar beet Sunflower
Durum
wheat Common
wheat
-1
-0,5
0
0,5
1
1,5
2
2,5
3
-3 -1 1 3
An
nu
al
yie
ld g
ro
wth
(%
)
Annual area growth (%)
11
Production drivers
Area
• Competition from other uses
• Crop allocation: drive towards specialisation and scale economies
• Close to biophysical and agro-economic potential
• Catching-up in some regions
• Regulatory, economic and agro-climatic constraints
Yields
12
While yield growth low in the EU
0%
1%
2%
3%
Ukraine Canada USA EU World
Annual wheat yield growth between 2002 and 2016
between 2000 and 2016
3 year averages taken Sources: DG AGRI, OECD-FAO Outlook 2016
13
While yield growth low in the EU
0%
1%
2%
3%
Ukraine Canada USA EU World
Annual wheat yield growth between 2016 and 2026
between 2002 and 2016 between 2016 and 2026
3 year averages taken Sources: DG AGRI, OECD-FAO Outlook 2016
14
… while gap with world level remains high…
0
2
4
6
8
10
12
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
t/ha
Soft wheat
EU-15 World
0
2
4
6
8
10
12
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
t/ha
Maize
EU-15 World
15
… within the EU the yield gap closes further…
0
2
4
6
8
10
12
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
t/ha
Soft wheat
EU-15 EU-N13 World
0
2
4
6
8
10
12
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
t/ha
Maize
EU-15 World EU-N13
16
Market drivers
Exports
• strong demand for cereals
• in particular EU wheat but also barley
17
… so opportunities remain to export wheat
Middle
East
North
Africa
SSA
Asia
Other
0
20
40
60
80
100
120
140
160
180
200
2006 2016 2026
Imports (Million t) and main destinations
Other
CAN
AUS
USA
UKR &
KAZ
RUS
EU
0
20
40
60
80
100
120
140
160
180
200
2006 2016 2026
Exports (Million t) and main origins
12%
16%
EU-share=20%
18
Market drivers
Exports
• strong demand for cereals
• in particular EU wheat but also barley
• Increased milk yields
• Firm poultry and pig production
• Limited growth in domestic oilseeds
• Increased maize use for ethanol
Feed
Biofuels
19
Domestic feed use dominates EU cereal use …stimulating maize
0
20
40
60
80
100
120
140
160
180
2010-1
6
2026
2010-1
6
2026
2010-1
6
2026
2010-1
6
2026
Total Wheat Maize Barley Other cereals
million t
Exports
Bioenergy
Feed
Food and industrial
20
Feed use will also dominate oilseeds …soybean gains
0
10
20
30
40
50
60
2006 2016 2026
million t
onnes
Soybean meal from domesticproduction
Soybean meal imports
Soybean meal produced fromimported beans
Other protein meal imports
Other protein meal use
21
… having effect on rapeseed production Annual area and yield change
-1
-0,5
0
0,5
1
1,5
2
2,5
3
-3 -2 -1 0 1 2 3
Annual yie
ld g
row
th (
%)
Annual area growth (%)
between 2006 and 2016
between 2016 and 2026
22
Protein crops recover in the EU
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2006 2011 2016 2026
Area (1000 ha)
field peas EU-15 beans EU-15
field peas EU-N13 beans EU-N13
…but area of protein crops remains small in total…
23
EU cereal prices still affected by exogenous factors
80
100
120
140
160
180
200
220
240
260
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
EU
R/t
Wheat Maize Barley Intervention price
2.5% percentile
97.5% percentile
24
Prospects for crops in the EU
Main cereals more dominant in area but yield growth fairly low
Increase of production and use of main cereals mainly driven by feed use
Meals more important in oilseed complex
