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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
Pigmeat
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
Wine
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
Potatoes
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
