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Development and Prospective Role of the EU Dairy Chain in the Global Market after Ending of Quotas

DAIRY FORUM, ANKARA, 20 MAYIS 2014 . Development and Prospective Role of the EU Dairy Chain in the Global Market after Ending of Quotas. Erhard Richarts, ife Institut Kiel 20. Mai , 2014. Content. The EU dairy market : A decade of change from support policy to market orientation

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Development and Prospective Role of the EU Dairy Chain in the Global Market after Ending of Quotas

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  1. DAIRY FORUM, ANKARA, 20 MAYIS 2014 Development and Prospective Role of the EU Dairy Chain in the Global Market after Ending of Quotas Erhard Richarts, ife Institut Kiel 20. Mai, 2014

  2. Content The EU dairymarket: A decadeofchangefromsupportpolicytomarketorientation Prospectivedevelopmentofworld milk marketandtheroleof EU

  3. Key Figures of the EU Milk Market 2012

  4. EU Exports of major Dairy Products, 1.000 t.

  5. Germany: Milk Price Evolution until 2005 Downward Trend despitealmoststablevolumes! Clear seasonalandmodestcyclicalvariations. €/100kg

  6. Germany: Milk Prices 2006 -2013 Seasonalfluctuationsoverlayedbycyclicalvariations Upwardtrenddespitegrowing milk productionandwithdrawalofpoliticalmarketsupport • 37,5 Ct/kg on average in 2013 arehistoricalrecord

  7. EU reformssince 2004 haveprepared EU dairyindustrytocompete on theworldmarketwithoutanysubsidiesforexports Erhard Richarts

  8. EU and international butterpricesmovingclosertoeachother! Erhard Richarts

  9. EU and international SMP pricesalreadyclosetoeachothersince 2006 Erhard Richarts

  10. Quotasand Milk Deliveries: Preparationfor „Soft Landing“ *)Fulfilmentestimated Erhard Richarts

  11. Markets2014/15 Domesticdemand in EU onlyslowlygrowing EU and World productiongrowingfaster The first time sincetwoyearsgrowingproductionmightkeeppacewithdemand. Prices arelikelytostay at therecentlyreducedlevels Stocks mightrecovertowhatisrehgardedastobe „normal“ after theyhadbeenrun

  12. Milk Deliveriesto EU DairiesandExports beyond EU Borders, in m. t 146 Exports in milk equivalentcalculatedaccordingsolidscontent

  13. Research projects in the ife Institute • Study: Economic analysis of EU dairy sector development beyond 2015 • This study is a contract work for the EDA (European Dairy Association) and has been finished in September 2013. • Presentation of the results: 26.09.2013 at the EDA Conference in Cologne. • The study “Impact of the world milk market on European milk markets and prices” analyses the production, consumption, trade and price developments and trends from 1990 to 2025 on the world market, on the EU market and in selected countries/regions.

  14. EU-Dairy Market 2011 – 2022: The potential ofthedomesticmarket plus exportsmightgrowfasterthansupplies, which will result in priceincreases

  15. EU: Prospectiveevolutionof milk volumesavailableforexportsavailablevolumes, m. t.

  16. Worldwide demandfor liquid products, m. t

  17. Demand for industrially produced Cheese, m. t.

  18. Demand for Butter, AMF, Ghee, m. t.

  19. Demand for WMP, m. t.

  20. Demand forSMP, m. t.

  21. A conservativeestimate: World demandfordairyproducts in milk equivalents(m. t) +61 +71

  22. Wheretoproduce all that milk? Mainlywhereitisdemanded, but domesticproduction will not besufficient in large areasofAsia, AfricaandLatinAmerica West and Central Europe, Poland, the Baltic States, all in EU, plus Belarus, North America, New Zealand, Argentinaand Uruguay havethebestpotentialstoincrease milk productionand will increasetheirexportsvery fast Iftheproductionof New Zealand (actually20 m. t.) hastogrowto 30 m. t. andbeyond, otherproductionsystemsthanalmostpasturinghavetobeintroduced! The costadvantageof New Zealand will decline.

  23. WTO after the Bali agreement EU hasalreadyfulfilledmostrequirements: Most importantisthe end ofexportsubsidies, whichhasalreadybeendecided. The necessaryreductionof prohibitive customtariffs on dairyis not so relevant, since a milk productionwhichexceedsdomesticrequirementsdoes not offermuchspaceforimportsanyway. • But thatdoes not rule out theprospectsoftradeflows also from Turkey tonearbyareas in Greece, BulgariaandCyprus.

  24. Summary EU is in a goodcompetitivepositiontoparticipate in thegrowthofthe international marketsof milk products. EU Production in theNortwesternand Central member countries hasthe potential of fast growth. EU consumption will growonlymodestly. The medium andlongtermpricetrend in EU and international marketisupward .

  25. Thankyouforyourattention

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