2 February 2021

3 minute read

Europe

COVID-19, Brexit and the pervasive influence of China on global commodities markets are all explored in AHDB’s latest Agri-Market Outlook.

AHDB’s biannual forecast of UK production, consumption and trade across livestock and arable sectors is now online.

It is intended to help farmers and wider industry assess the potential impacts on their sector to help them plan, prepare and budget for the year to come.

Phil Bicknell, Market Intelligence Director at AHDB, said the Outlook was one of the most challenging AHDB has ever produced, given the huge impact of COVID-19 on both domestic demand and the economies of key markets. Disruptions to trade following the end of the EU exit transition period and the knock-on effects on farm are also factored into the Outlook.

Phil added: “As 2021 gathers pace, the ongoing impact of COVID-19 means that uncertainty is again the backdrop as we take our regular look ahead at our farming sectors.

“That said, we do have pockets of clarity, particularly in relation to some headline policy areas that impact our industry, such as the continuation of tariff-free and quota-free trade between the UK and EU. That has been a critical issue for agriculture – the EU-27 is both the UK’s biggest customer and biggest supplier of a range of agricultural products.

“As much as policy impacts farming, the fundamentals of supply and demand remain key drivers. These are increasingly international in their scope and impact. I have no doubt that our future outside the EU will bring both opportunities and competition but I’m also conscious that it will bring increased exposure to market volatility.”

The Outlook looks in-depth at what the future may hold at a sector by sector level, as well as some of the longer-term policy drivers.

Highlights include

• A four percent rise in UK pig meat production, exceeding one million tonnes for the first time; an eight percent drop in imports, pressured by large domestic supplies and a forecast decline in consumption; a seven percent decline in export volumes, underpinned by weaker Chinese demand and disruption to UK exports to the EU; pig prices expected to remain under pressure.
• A five per cent fall in beef and veal production, due to tighter cattle availability; a three percent fall in domestic consumption, due to easing retail sales; a four percent growth in imports, assuming foodservice demand improves as COVID-19 restrictions ease; a three percent fall in exports, largely due to lower domestic production.
• A four per cent fall in UK sheep meat production to 285,000 tonnes; overall lamb throughput in 2021 forecast at 12.5 million head, four percent below year earlier levels; imports and exports both expected to contract slightly. Domestic demand unlikely to maintain the growth seen in 2020 but limited global supplies may offer some price support.
• GB milk production to total 12.56 billion litres for the 2020/21 season, up 0.2 percent; demand dynamics still uncertain due to COVID-19, given the importance of the out-of-home market; downwards pressure on prices in first half of the year; global demand mixed, depending on each country’s pandemic management and economic recovery; trade friction with EU to impact short shelf-life products.

Click here to view the full report.

TheCattleSite News Desk