Forecast of Food Farming and Fertilizer Use The EFMA Forecast Forecast of Food Farming and Fertilizer Use October 03

The EFMA forecast : Agenda : The methodology for the EFMA forecast : The objectives. The principles. Assumptions and scenario : Global economic trends. The European scenario. The national approach. The 2003/2013 forecast October 03

The objectives, principles and main stages The EFMA forecast : The objectives, principles and main stages October 03

The EFMA forecast : Objectives & principles. Long term consumption forecast : Parallel and convergent with sales forecast (ISC) : >> Convergence by year n-3. A « down-up » procedure, step by step : Per country. Crop acreage forecast, considering : Global and European Agro-economic trends. Agricultural policies. Application rate forecast, considering : Evolution of technologies and agricultural practices. Environmental policies. Short term to long term forecast : Campaigns : n-1/n, n/n+1, n+4/n+5, n+9/n+10 Based on « scenarios for the future » : General trends, global and European. National projections. October 03

The EFMA forecast : various stages of the process : an expert approach 1/ Building a scenario : March The « European context », prepared by the leader of the WG : Agro-economic series & trends, world & Europe. Agricultural & Environmental policies. The EFMA scenario for a European agriculture. >> The impact on fertilizer use, as foreseen by the forecast WG. 2/ Adapting the EFMA scenario to national level. May The impact of national situation and policies >> the « country report ». 3/ Making the national forecast. May- June 4/ Finalizing the European approach. June Critical approach of the forecast WG on each national scenario. 5/ Finalizing the European forecast : integration of all nationals. July 6/ Publishing and circulating the forecast. September October 03

The national approach : developing the expertise The EFMA forecast : The national approach : developing the expertise October 03

The EFMA forecast : Crop needs (- nutrients from other sources). The national approach. Sources of information for Application rate : Crop needs (- nutrients from other sources). Advisory service, consultants. Publications (scientific, “Farmers weekly”). Your control calculation. Watch “other nutrient sources” (national budget!) : farmyard manure, slurry sewage sludge others efficiency October 03

The EFMA forecast : Statistical yearbook. The national approach. Sources of information for Crop area planted : Statistical yearbook. Newspapers, journals, etc… News agencies e.g. Agra Europe. press releases : - Ministry of Agriculture. - Growers associations. - Newspaper / journal for merchants. - International produce traders. - Plant breeders / -associations. October 03

The EFMA forecast : Implementation of EU-rules and –programmes. The national approach. Sources of information for Environmental policy : Implementation of EU-rules and –programmes. National programmes. National / regional limitations. points of discussion (conferences, media). Intensity of discussions (conferences, media). Direct contacts (ministry, n.g.o., administration). October 03

The EFMA forecast : Agriculture does not jump ! The national approach. Some bits of experience : Agriculture does not jump ! Watch out for crucial political decisions. Never believe just one source … Regular amendments of the set of data lead to a stable and reliable base. You are the best one to judge and to decide ! Accept that you can’t be right ! October 03

Assumptions and scenario The EFMA forecast : Assumptions and scenario October 03

The EFMA forecast : October 03

The EFMA forecast : EU 15 The EU is expected to increase its market share slightly, from 7.5% to 11.1% over the projection period. The devaluation of the Argentine peso – along with low domestic demand – increases Argentine market share. It climbs from 11.3% in 2002/03, to 13.2% by 2012/13. With recovery in production, Australian and Canadian market shares are projected to increase to their former levels over the next ten years. EU 15 October 03

The EFMA forecast : In 2003/04, a slight decrease in wheat area is projected because of lower gross returns from the grains to oilseeds payment ratio. From 2003/04 on, most of the production increase is projected to come from yield growth, as only limited area substitutions are expected. By 2012/13, the EU produces 115.7 mmt. Feed use increases to 56.7 mmt in 2012/13. Domestic price remains below world price for 2003/04, allowing the EU to export without subsidy, though in the middle of the projection period domestic price exceeds world price. By 2012/13, EU exports reach 11.5 mmt. October 03

The EFMA forecast : The reforms of Agenda 2000 lower internal grain prices early in the projections. With a relatively weak euro assumed, the European Union (EU) exports wheat without subsidy through 2011. Fueling EU exports through 2011 are an assumed decline in the crop area set-aside rate, limited cropping alternatives to wheat, abundant wheat stocks, and a favorable exchange rate. The EU share of world wheat trade increases from 14.5 percent in 2002 to 21 percent by 2011. As wheat stocks decline due to increased domestic feeding and accelerating exports, pressure to maintain EU land set-aside requirements diminishes. Strong producer pressure is expected to result in lower set- aside requirements midway through the period. As a result, the EU is able to produce and export more grain. October 03

The EFMA forecast : World oilseed prices climbed strongly in 2002/03 as demand grew faster than supply. Soybean prices are expected to weaken next year under the pressure of record supplies. High oil demand boosted sunflower prices in 2002/03 despite an expansion of world production. The continued decline in rapeseed production caused rapeseed prices to increase for the third straight year. In the long-run, all oilseed prices are expected to return to their historic relationships. October 03

The EFMA forecast : EU 15 Fueled by yield growth and a meager demand increase, the EU increases its net exports of barley to 8.4 mmt in 2012/13. Australia recovers its production and exports in 2003/04, reaching 3.5 mmt of net exports in 2012/13. With recovery in yields and area, Canada increases its barley exports in the beginning of the projection period, while this growth is reversed later because of increasing domestic feed demand. EU 15 October 03

The EFMA forecast : EU 15 October 03

The EFMA forecast : EU 25 CAP Reform E U prospects October 03

The EFMA forecast : October 03

The EFMA forecast : October 03

Scenario for the forecast A transition year for the forecast exercise : EU 15 and EEC 10 still separated. Crop based approach used for 4 EEC countries : Poland, Hungary, Czech Rep and Slovakia. New CAP reform included with a temporary scenario : Full decoupling :(single payment per ha, whatever crop is grown) but limited : safety net of the intervention price. Options of implementation : Animal production : partial decoupling except UK and Sweden. Arable crops : full decoupling except France and Spain. Cross compliance : (stricter implementation of environmental regulations) >> only slight additional impact on N application rate to be expected. October 03

CAP reform The 26th June compromise : Single payment (“full decoupling”), is the basis. Nevertheless, possible flexibility : Partial decoupling possible, but : Only France and Spain may choose this option. The administrative burden will be a big constraint. Delay of implementation possible (till 2007). >> Negative impact on fertilizer : - Increase of voluntary set aside in less favoured areas. - Cereal area is likely to decrease. Set aside policy continuing as in Agenda 2000. Set aside lands kept in the rotation. Possibility to grow non food crops. >> Neutral impact on fertilizer : No further impact of the set aside policy. October 03

CAP reform The negative impact on N consumption will come from : Full decoupling : (single payment per ha, whatever crop is grown) >> decrease of COPs area, crops with high application rate. but limited : safety net of the intervention price. Cross compliance : (stricter implementation of environmental regulations) >> slight decrease of N application rate to be expected. Expected decrease of N consumption in 2010 : In addition to the negative trend already foreseen (- 7.5% in 2002) Between 1 and 2% of present EU 15 N consumption. Between 100 and 175 kT of N. >> it corresponds to the “best case” assessed in January October 03

The EFMA forecast : The 2003/2013 Forecast October 03

Fertilizer nutrient consumption in the European Union October 03

Forecast changes in regional fertilizer use: 2012/2013 based on average 2000-2003. October 03

Forecast changes in farming food crops : 2012/2013 based on average 2000-2003. October 03

Forecast changes in fertilizer use by crop: 2012/2013 based on average 2000-2003. October 03

Fertilizer use in the European Union October 03

Mineral nitrogen efficiency October 03

Fertilizer use in the 10 candidate countries. October 03

Methodology developed for candidates The EFMA forecast : Methodology developed for candidates October 03

Poland Total cereal area The EFMA forecast : Poland Total cereal area October 03

Poland Nitrogen / yield ratio The EFMA forecast : Poland Nitrogen / yield ratio Correction Correction October 03

Poland Nitrogen consumption The EFMA forecast : Poland Nitrogen consumption 1050 kt October 03