Cereal production rises by 50m tonnes but prices go into reverse

FARMERS in the European Union successfully responded to market signals by increasing cereal production by more than 50 million tonnes this year, but prices have reversed their upwards trend, according to Copa-Cogeca.

The umbrella bodies for European farmers and agri co-ops said prices have fallen to a much lower level than one year ago, with no visible signs of this price benefit at consumer level, while input prices, such as fertilisers, have rocketed, putting unbearable pressure on production costs, clearly jeopardising farmers’ income and ability to produce.

Copa–Cogeca’s Animal Crops Committee president, Paul Temple, warned market prices are not covering production costs even if you include the single farm payment.

“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 said.

Mr Temple urged 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,” he said.