Ref. Ares(2021)7938574 - 22/12/2021
COV(21)5763:2
Brussels, 17th September 2021
IMPACT OF COVID-19 ON THE AGRICULTURAL, FORESTRY
AND FISHERIES SECTORS
COPA AND COGECA ASSESSMENT
June 2021 – September 2021
This note provides an update to the Copa and Cogeca assessment COV(21)3805. This document
is a non-exhaustive compilation of contributions received from Copa and Cogeca national
member organisations.
Introduction
According to the Commissioner for Health and Food Safety, Stella Kyriakides, over 75% of the
EU population is vaccinated. Given this success, the EU economy is showing positive
developments despite the remaining challenges and many uncertainties.
Furthermore, 2020 was an exceptionally challenging, yet successful year for EU agri-food trade,
the total value of which reached €306 billion: €184 billion in exports and €122 billion in
imports. Both values represent a slight growth of 1.4% and 0.5% respectively compared to 2019.
We certainly agree with the Commissioner for Agriculture and Rural Development, Janusz
Wojciechowski, who mentioned that “The success of agricultural trade is clearly linked to the
Common Agricultural Policy, which supports competitiveness and innovation, and also to the
excellent reputation of our products as being safe, sustainably produced, nutritious and of high
quality.” From the EU farming perspective, we must ensure
fair trade and consistency with
other EU policies such as the Green Deal. Even though EU citizens’ lives are progressively going back to normal, farming is still seriously
affected by the COVID pandemic in the short and medium term (see below). Significant
uncertainties remain including those surrounding animal plant health and trade developments
(e.g. Brexit). With regard to seasonal workers, the majority of our members acknowledged that
the EU guidelines have been properly implemented. However, some Member States still are still
facing a shortage of available workers or a lack of skilled workers, both locally and from abroad
(especially in terms of digital skills). Overall, difficulties remain when it comes to coordinating
social security and implementing an effective agri-food risk management system.
What is more worrying are the trends reported in key Member States, notably the increase in
main production costs (e.g. feed (1), fertilisers (2), energy (3) and construction materials (4)),
farming equipment (5), the scarcity of those inputs, the impact of adverse weather conditions
and the effect of inflation.
(1) In the last twelve months, the price of feed has increased on average by 25% to 35% across
Europe. In some MS, the situation has become critical, especially for pigmeat, with production
costs considerably exceeding selling prices.
(2) Most fertiliser prices soared in 2021, particularly those for phosphates and urea. This was
driven by strong demand and higher input costs. Potash prices remained broadly stable on
ample supply. In Europe, the nitrogen solution (UAN) situation is particularly problematic. This
is due to rising global fertiliser demand and gas and sea freight prices as well as insufficient
Copa - Cogeca | European Farmers - European Agri-Cooperatives
61, Rue de Trèves | B - 1040 Bruxel es | www.copa-cogeca.eu
EU Transparency Register Number | Copa 44856881231-49 | Cogeca 09586631237-74
competition in the EU domestic market. However, the main cause of weak competition on the
single market is the implementation by the European Commission of an anti-dumping tax in
2019 on UAN imports from the main producing countries. For users, UAN alone makes up 26%
of their operating costs in Europe. The
continuation of the anti-dumping measures prevents the
operation of a fair and transparent market where UAN could help to overcome sustainability
challenges, see CDP(21)5701. Furthermore, the Commission is proposing to apply the CBAM to
steel products and fertilisers. The price of fertilisers will skyrocket, further increasing the cost of
agricultural production in the EU while making the use of imported food more competitive and
attractive.
Source: European Commission, DG AGRI Price Dashboard No 107 – April 2021
edition1. This table displays price data for energy and fertilisers in the EU. Although it
only provides data up until April 2021, it is intended to give an indication of the most
recent price developments.
(3) The impact of electricity price increases across the EU has not yet been fully quantified (in
some countries, the price increased threefold over the course of one year) nor has the spillover
effect into agriculture. This has recently surfaced as a great cause for concern for some MS and
MEPs.
(4) There have been many reports of an emerging shortage of construction materials for the
building industry, and of the consequential ‘supply and demand-related’ increase in
prices. Farmers are confronted with price hikes in the construction of buildings as well as with
construction and commissioning times that are far from certain. This is due to limited supplies
and shortages in the supply chain. We have received reports of price increases for steel,
polyurethane insulation, metal sheet and wood. According to Eurometal, EU steel prices reached
a 24-year high in June2. For the European organisation, long steel product prices will remain
strong in the near term, as mills have continued to report strong order books. The situation is
similar on the wood market. The Global Sawlog Price Index (GSPI) has increased for three
consecutive quarters to almost $79/m3 in the 1Q/21, which is substantially higher than its 25-
year average. The European Sawlog Price Index (ESPI) rose to €81.44/m3 in 1Q/21, which is up
nine per cent on the previous quarter. The most significant price increases from late 2020
1
https://ec.europa.eu/info/sites/default/files/food-farming-fisheries/farming/documents/commodity-price-
dashboard_2021-05_en.pdf 2
https://eurometal.net/eu-steel-sections-prices-reach-a-24-year-high/
2 | 5
occurred in the Baltic States and Eastern Europe3. This can push up the cost of a new livestock
building by between 10% and 15%. In addition, this can increase the cost of renovating existing
buildings, increasing production costs by 8% to 15%.45 These elements should at least be taken
into account in the debates at European level, such as those on phasing out cages on farms (e.g.
cost, transition period, etc.).
(5) The general Business Climate Index for the Agricultural Machinery Industry in Europe
seemed to reach its peak in the months of May and June, with the highest levels recorded since
2008 according to CEMA6. The volume of orders currently corresponds to a production period
of 4.7 months, which is the highest value ever recorded by the European agricultural machinery
survey. However, this situation does not reassure manufacturers, who report a decline in their
overall optimism. In fact, even more uncertainty surrounds the extent to which the orders can be
carried out against the backdrop of extreme price increases and shortages on the supplier side.
31% of the companies expect production to be stopped due to a lack of specific parts in the
coming month. In this context marked by strong demand, rising steel prices and limited stocks
of specific components, an increase in the prices of certain agricultural equipment is observed. It
is also important to remember that the price of agricultural equipment has been rising steadily
over the past decades7. Furthermore, applying a CBAM to iron and steel products will lead to an
increase in production costs given their use in agricultural equipment and machinery.
It is against this backdrop of a rising food price index8 and a significant increase in farming
input prices that MEPs within the AGRI and ENVI Committees decided to go beyond the Farm
to Fork Strategy proposed by the Commission last week making the necessary transition
untenable for farmers. The final text contains some interesting proposals and developments,
particularly when it comes to innovation, carbon farming, trade and the strengthening of agri-
cooperatives. However, a limited yet very impactful number of proposals cross the red line and
quite simply call into question our food sovereignty, the future of our agriculture and our rural
areas. This is all the more difficult for the farming community to understand as we are all only
just beginning to realise the considerable impacts of this strategy in its basic version proposed
by the Commission. (CDP(21)5868 (rev.1))
We also call for a real methodological breakthrough at EU level: we cannot continue to add
objectives and targets without considering the costs incurred by and the impacts of these
proposals.
Sectoral analysis:
Fruit and vegetables
Stone fruit orchards and apples and pears, to a lesser extent, have been damaged by cold snaps
in several Member States. The 2021 stone fruit and pear harvests represent the smallest harvests
on record in Europe in the last 30 years. According to Prognosfruit, EU apple production for the
2021/2022 season is estimated to be 11,735,000 T. This year’s harvest is estimated to be up 10%
on last year, but only up 1% on the three-year average. This marks the lowest pear harvest seen
this decade. Brexit is still creating major problems. Practical solutions are needed for
phytosanitary checks provided that the integrity of the single market is ensured. Access to
seasonal labour, rising export costs, the Russian ban and higher production costs remain key
issues.
Flowers and ornamental plants
3
https://www.woodbusiness.ca/global-timber-lumber-prices-up-in-q1-2021-wrq/ 4
https://www.farminguk.com/news/farmers-feel-effects-of-rising-raw-material-prices_58573.html
5
https://www.reussir.fr/la-flambee-des-prix-des-materiaux-de-construction-leste-les-couts-de-lelevage 6
https://www.cema-agri.org/index.php?option=com_content&view=article&id=841&catid=24&Itemid=208 7
https://www.entraid.com/articles/augmentation-prix-tracteurs-agricoles 8 8 FAO food price index - up 3.9 points (3.1 percent) from July and 31.5 points (32.9 percent) from the same
period last year
http://www.fao.org/worldfoodsituation/foodpricesindex/en/
3 | 5
The production of flowers and plants seems to be stable. It seems that with fewer restrictions
people are falling back into old consumption patterns.
Potatoes
After the disruptions in 2020, potato markets are normalising in all segments except for starch
due to the high level of stocks. The EU potato area is estimated to be 1.48 million ha, down by
3.3% y/y. Yields are expected to be in line with or below the five-year average. Quality may pose
challenges for the supply chain. Farmers are facing increasing costs (plant health, storage,
processing, trade, machinery and equipment).
Arable crops
The stocks in the major exporting countries are down and the harvests are lower than expected.
The market is extremely volatile. Prices for all cereals and oilseeds in the EU are up year/year.
Demand from China continues to be high. The EU 2021/2022 cereal balance sheet shows a EU
total cereal production that exceeds EU consumption and an ending stock of 41 million metric
tonnes compared to 46 last year. The EU durum wheat ending stock has dropped by about 0.5
million tonnes. Fertiliser prices are still at the highest level recorded in the past 12 months. The
total EU oilseed harvest recovered from last year but remains below the five-year trimmed
average for rapeseed. Sunflower production recovered more quickly. European farmers need
high prices so that they can invest in new technologies to achieve the goal of the climate
transition. With regard to maritime transport, the Baltic Dry Index (BDI) averaged 14 percent
higher m/m in August reflecting robust demand for raw materials.
Sugar
In a context of the lowest stock levels, which the Commission estimates to be at 1.1 million
tonnes by the end of September 2021 – the lowest levels since 2010 –, and given that the EU-27
sugar beet area forecast has been revised downwards by -1.4%, the EU-27 will remain a net
importer of sugar in 2021/2022. In August, sugar prices peaked. The average EU price in June
was up €18 on last year (EU price reporting).
Wine
The 2021 wine harvest is expected to be significantly lower compared to the previous marketing
year. In Italy, wine production is estimated to reach up to 45.3 m hectolitres, a 9% drop
compared to the previous year. Spain forecasts a harvest of 39.5 m hl, 7 m hl less than in 2020.
Among the three major producing countries, France will experience the sharpest drop, -29%
compared to 2020, as the harvest is not expected to exceed 33 m hl. Wine production in
Portugal and Hungary is expected to remain rather stable, at 6.5 m hl and 2.5-3 m hl
respectively. Several factors have contributed to the historically low and short harvest. In
addition to the spring frosts that caused significant damage, diseases have exacerbated the
losses. On a positive note, the quality of the grapes is expected to be considerably higher.
As far as the market is concerned, despite the reopening of the HoReCa sector and the
suspension of the US tariffs related to the Boeing-Airbus dispute, the impact of the COVID-19
pandemic is still visible. In this context, the extension of the planting and replanting
authorisations expiring in 2021 until December 2022 came as a welcome relief to winegrowers.
Pigmeat
European pigmeat consumption and production seem to be stable. The sudden drop in demand
for European pork from third countries pushed the prices in many countries below €1.25/kg,
which is significantly below the production costs (e.g. increased feed costs). Many farmers,
including modern farms, are considering giving up pig production. There were protests
organised by pig producers especially in the newer MS. Some national administrations are
asking for support and long-term strategies. Access to labour in the meat industry remains
challenging.
Poultry and eggs
4 | 5
Copa-Cogeca members are witnessing a slight decrease in consumption and production driven
by the impact of avian influenza. Poultrymeat prices seem to be stable, whereas egg prices were
under enormous pressure during the summer. While the latter slightly increased in September,
the overall situation is still very tense especially due to the continuously high feed prices. Many
farmers have decided to put the laying hens out of production and slaughter them earlier. In
general, increased imports helped to put pressure on prices, despite a decrease in production.
Dairy
The price for raw milk has been stable since last month (€35.8/100kg) and there were increases
in prices for butter, whole milk powder, skimmed milk powder and cheddar (+1.1%, +1.0%,
+2.8% and +0.3% respectively). Raw milk production is stable. Butter (-0.9%), SMP (-3.7%) and
WMP (-12.1%) production have decreased compared to last year. While EU exports have
decreased for butter, SMP and WMP, they increased for cheese in the first half of 2021
compared to last year.
Beefmeat and sheepmeat
Beefmeat prices are increasing, averaging €389.1/100kg, +10.2% since last year (for young
bovines/young bulls/steers). While production is stabilising, it is decreasing in some categories
like bulls, bullocks, and young cattle.
Sheepmeat prices are still increasing for light lamb, which lies at €633.7/100kg, +7.4%
compared to last year. For heavy lamb, we are at €656.7/100kg, +10.4% compared to last year.
Sheep slaughtering is up 1.4% compared to 2020 (first semester) and goat slaughtering is at
+8%. EU exports have increased by 4% on average, whereas imports have decreased by 19%
(driven by NZ produce).
Olive and Olive Oil
The outlook for the table olive and olive oil markets is positive. Consumption in the EU is
recovering in several channels (mainly retail and progressively in the HoReCa sector). Exports
have increased in value. According to the latest IOC figures, extra virgin olive oil prices in
September 2021 are up 60% compared to the same period in the previous marketing year. The
harvest is expected to be average in most countries except for Greece where production is
expected to drop by 25% due to the summer wildfires.
5 | 5