Second COVID-19 wave hits EU agri-food markets
- Second coronavirus wave hits agri-food markets across the EU
- Economic fallout is exacerbated by Brexit, EU-US trade disputes and animal disease outbreaks
- EU farming ministers recently asked for more COVID-19 aid for the bloc's agri-food sector
Europe's main farming association Copa-Cogeca painted a worrying picture for the EU's agri-food markets following the second wave of mass COVID-19 outbreaks, which the group predicts will worsen due to trade disputes and animal disease outbreaks.
In their latest market update on 20 November, Copa-Cogeca acknowledged that the measures taken by the European Commission and member states helped keep the agri-food sector functioning during the second wave of lockdown measures, but said there is still "a rapid deterioration of the market situation".
According to IHS Markit calculations, total COVID-19 state aid for the EU agri-food sector now stands at nearly €2.9 billion across the bloc. On top of that, the Commission introduced a range of market support measures during the first wave of COVID-19, such as crisis distillation for wine and private storage for beef and dairy.
But Copa-Cogeca said this support was not enough to help some sectors recover from the first lockdown. They added that many producers are under stronger market and financial pressure because they now face the added prospects of a no-deal Brexit (EU-UK), ongoing EU-US trade disagreements, and the outbreak of animal diseases like African swine fever (ASF) and avian flu.
"We therefore call for urgent action from the European Commission," they wrote. "An adequate level of support must be granted and must come from outside the CAP (Common Agricultural Policy) budget."
Member states have recently also asked the Commission to provide more market support to help their agri-food producers deal with COVID-19 disruptions during the last Council meeting of EU farming ministers on 16 November. But environmental groups have warned EU policymakers that any agricultural recovery funding should be geared towards helping farmers' transition to a more sustainable model in the long term instead of towards a business-as-usual approach.
Copa-Cogeca's sector summary
- EU prices are at a "dramatically low level" while production costs and feed prices are rising
- Farmers could benefit from additional resources to control the spread of ASF
- Policymakers should consider emergency slaughtering for alternative uses and the reintroduction of processed animal proteins
Poultry, meat and eggs
- Better monitoring of avian flu is needed to prevent further outbreaks
- Farmers need greater support in rolling out biosecurity measures
- Brexit poses a significant risk to the sector's economic stability and a level-playing field is needed once the UK leaves the EU
Dairy, beef, veal and sheep
- These markets did not recover from the first wave of COVID-19 and the situation is likely to worsen with food service channels operating at a reduced capacity
- They also face a supply-demand imbalance from a no-deal Brexit
- The Commission needs to be prepared to support these sectors if no agreement with the UK is found
- Market outlook is "very uncertain and bleak" as COVID-19 continues to affect demand
- Stocks across the EU are quite high and multiple trade-related challenges lie ahead - Brexit, US-EU trade disputes
- Copa-Cogeca support the Commission's plan to extend the current market support measures to October 2021, but suggest it will not be enough
Cereals and dried fodder
- High dried fodder stocks exist in Italy and Spain due to the increase in freight costs
- Demand on the EU market from the livestock sector remains stable
- An increase in feed prices in comparison to the summer (below 3%)
Fruit and vegetables
- Fewer reports of problems regarding access to seasonal workers from EU and non-EU countries
- Slight decrease in market prices although the costs remain higher due to COVID-19 protective measures
- Total production is forecast to be 54 million tonnes
- The surplus for chips processing is estimated to be between one to two million tonnes
- Buyers could attempt to break contracts to buy back potatoes on the spot market more cheaply
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