Brussels, Belgium
June 24, 2010

Copa-Cogeca warned today of the low, volatile EU cereal prices, coupled with high production costs, and urged the food supply chain to recognize the difficult market situation.

The issue was urgently debated by Copa-Cogecas’ Working Group on Cereals. Copa-Cogeca argues that current prices are below production costs. EU cereals producers are calculating their production costs for the next campaign within the framework of the current Single Farm Payment System. The pressure of growing costs and credit could lead to a drop in cereal production next year, leading to increased price volatility. This year, more than 1 million ha were already not cultivated under arable crops. Copa-Cogeca consequently urges the whole food supply chain to recognize the high costs of production and increasing risk of volatile prices.

Paul Temple, Chairman of the Copa-Cogeca Cereals working group, said “Cereal production has never been more important, especially with growing world food demand. European farmers need the confidence to see a return from the market and maintain EU production. This will also protect consumers from the increasing risk of volatile prices and ensure livestock producers have feed at competitive prices. EU crop production is a core element of economic activity and we urge the Commission not to disadvantage us in the current talks to liberalise trade with Mercosur, the Latin American trading group. With 60% of cereals dedicated to feed for the EU livestock sector, any concessions given by the EU to open markets to meat imports from Mercosur countries will badly affect the EU cereals market
balance. We must not export our farming activity.”

Copa-Cogecas’ meanwhile published today its new forecasts for EU-27 cereals production for the 2010/11 marketing year, which show stable production, with a slight drop of 1.3% seen, compared to the good harvest in 2009/10. A bigger fall of 7.4% in barley production can be seen and a slight increase of 3.3% in soft wheat production is estimated for 2010/11.

See here for further details http://www.copa-cogeca.eu/img/user/file/ALL_CER2010.pdf

Website: http://www.copa-cogeca.be

Published: July 2, 2010