In 2008, EU farmers successfully responded to market signals by increasing EU Cereal production by more than 50 million tonnes (increased sowings by 7% and unusually good weather conditions globally). This represented an increase in production of more than 20% compared to last year. It has been confirmed by Copa – Cogeca’s December estimates released last week (nearly 311 million tonnes) with a final increase in production compared to the September figures (nearly 307 million tonnes). As a result, cereal prices have reversed their upwards trend. They have fallen back to a much lower level than one year ago with no visible signs of this price benefit at consumer level. On the other hand, input prices such as fertilizers
have rocketed, putting unbearable pressure on production costs, clearly jeopardizing farmers’ income and ability to produce.

Commenting on this difficult situation, Copa – Cogeca’s President of the Arable Crops Committee, Paul Temple, reflected EU farmers’ thinking and warned, “Market prices are not covering production costs at the moment – even if you include the single farm payment. As a consequence farmers are cutting back on their plantings for the next harvest and will also cut back on the inputs for those crops. This implies a swing back to lower production and greater vulnerability to any form of adverse climate conditions.”

He went on to urge the supply chain to have greater appreciation of the costs of production. To fail to appreciate the need for EU grain production when world stocks are at an all time low particularly if expressed in the terms of days of global supply, is of real concern.

This will increase the likelihood of price volatility at a time when food price stability and food security are essential to citizens in the EU as well as in other parts of the world. This is not a sustainable way to produce cereals and provide consistent supplies for the market.

For further information, please contact:

Marie-Christine Ribera
Director
Tel.: +32 2 287 27 37
Marie-christine.ribera@copa-cogeca.eu

Simon Michel-Berger
Press Officer
Mobile: + 32 474 840 836
simon.michel-berger@copa-cogeca.eu