Ref. Ares(2021)7938574 - 22/12/2021
COV(21)3805:1 -
Art. 4.1(b) Privacy
Brussels, 11th June 2021
IMPACT OF COVID-19 ON THE AGRICULTURAL, FORESTRY
AND FISHERIES SECTORS
COPA AND COGECA ASSESSMENT
April 2021 – June 2021
This note provides an update to the Copa and Cogeca assessment COV(21)2290 (rev.3). This
document is a non-exhaustive compilation of contributions received from Copa and Cogeca
national member organisations.
Introduction
Given the success of the EU vaccine rollout, the EU economy is showing positive developments,
although significant uncertainties remain. Nevertheless, the farming sector is facing multiple
challenges, notably due to increasing production costs (e.g. feed, fertilisers and fuel), the
availability of inputs, trade developments and the impact of bad weather conditions. For
example, there has been a significant increase in feed and feed additive prices (well above 3%).
Although the situation linked to the transportation of agri-food products has improved, there are
still substantial difficulties with customs when trading with third countries (e.g. Brexit) and an
increase in costs.
The study on the
Preliminary impacts of the COVID-19 pandemic on European agriculture 1
shows that during the pandemic “the EU agri-food supply chain demonstrated a high degree of
resilience. The value of the output of the agricultural industry declined by only 1.4% in 2020
compared to 2019 and, when compared to the 2015-2019 average, grew by 2.9%.”
Nonetheless,
sectors highly dependent on the food service sector (e.g. wine, beef and veal) have faced major
difficulties. Flowers, plants and sugar have also suffered considerable financial losses. Farm
incomes also declined compared to 2019 (-7.9%, which corresponds to 7.1 billion EUR). EU
agriculture dealt with shortages “caused by movement restrictions (1 million seasonal workers in
agriculture); delays in food deliveries, raw materials and other agri-food inputs as well as a
slowdown in food production because of virus outbreaks in processing plants.”
While “the EU
response was highly effective in preserving the integrity of the Single market”, to better respond
to future crises, and among other measures, consideration should also be given to the
“decoupling of the CAP crisis reserve from farmers’ direct payments” to reinforce the EU’s
financial capacity during crises1.
While the majority of countries have properly implemented the EU guidelines for seasonal
workers, we still have some concerns over the availability of seasonal workers during the
upcoming season. The remaining issues include problems with social security in individual cases
where workers are employed simultaneously in different Member States, for example. The
quarantines imposed by the authorities vary from one country to another, which can lead to
additional costs. This disrupts the hiring process, especially for cross-border commuters.
1
Preliminary impacts of the COVID-19 pandemic on European Agriculture: a sector-based analysis of food systems and
market resilience, study requested by the Agri Committee, European Parliament Policy Department for Structural and
Cohesion Policies, Directorate-General for Internal Policies, PE 690.864 - MAY 2021
Copa - Cogeca | European Farmers - European Agri-Cooperatives
61, Rue de Trèves | B - 1040 Bruxelles | www.copa-cogeca.eu
EU Transparency Register Number | Copa 44856881231-49 | Cogeca 09586631237-74
Moreover, seasonal workers are not always included in the vaccination programmes of the
destination countries.
Sectoral analysis:
Fruit and vegetables, flowers and ornamental plants
Stone fruit orchards and apples and pears, to a lesser extent, have been damaged by cold snaps
in several Member States. European peach and nectarine production is forecast to be 18% lower
than in 2020 due to frost damage, amounting to 2,420,821 t. The 2021 European apricot crop is
currently forecast to total 344,000 t, down 40% on the 2015-2019 average. Given the exceptional
gravity of the situation for the F&V sector, we have called on the Commission to provide all
possible extraordinary and additional measures at EU level to compensate the affected
producers FL(21)2878 (rev.1). For apples and fresh oranges, prices have been historically high.
Tomato prices peaked in March/April. However, the EU is importing even more tomatoes from
Morocco and Turkey. Following cold snaps, replanting has been necessary in some regions.
Growers have scaled down the production of fresh products bound for the food service sector
(for example salads). Retailers are imposing penalties on suppliers if they fail to deliver goods at
the right time to retail shops, even if the reason is due to the COVID-19 restrictions. Access to
seasonal labour, the closure of the food service sector, rising export costs, the Russian ban and
higher production costs remain key issues. Since January, the situation in the flower and plant
sector has improved due to the re-opening of sales channels. There are some issues with the
increasing raw material prices.
Potatoes
Due to lower demand, market prices remain below grower production costs. Growers have had
to manage surpluses. The spot market price has recently increased from 50 €/t to 100 €/t,
reflecting higher demand as the food service sector and festive activities will be authorised in the
summer. The potato surface areas in BE, FR, DE, NL and FI have dropped by between 3% to 5%
as a result of lower contract prices and higher production costs for the MY 2021-2022. The
starch potato market was down.
Cereals
The market is extremely volatile. Prices for all cereals and oilseeds in the EU are up month on
month and year on year. Demand from China continued to be the major driver in this runup in
price combined with the usual weather uncertainties at the start of the summer growing season.
In the EU-27, spring crop germination and growth have been delayed due to cold snaps.
Fertiliser prices are still at their highest level in the past 12 months. In April 2021, China revised
its livestock feed guidelines to reduce the use of maize and soya meal in pig and poultry feed and
proposes to replace maize with wheat, sorghum, barley, rice and cassava and to replace soya
meal with canola, rapeseed, cottonseed, peanut and sunflower meals and DDGS. Several
countries currently apply export or import restrictions such as quotas and/or taxes. With regard
to ocean freight markets, the Baltic Dry Index (BDI) average value in May 2021 was up more
than fivefold year on year, reflecting a strong rebound from last year’s COVID-related downturn.
The WTO agreed to establish two new dispute panels (barley and palm oil).
Sugar - ethanol
EU sugar consumption in the food sector dropped by 0.5 million tonnes (-3 %) in 2019/20 in
comparison to 2018/2019. In 2020/2021, EU consumption in the food sector could regain
100,000 tonnes. EU-27 sugar production is estimated to be at 14.5 million tonnes (-11% year on
year). EU exports and imports have declined. On the world market, prices for raw and white
sugar rose in April and May 2021 but remain on average below the EU reference price. 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.
Wine
According to preliminary estimations, 30% of the 2021 harvest (€2 bn) has been lost in France
alone due to the frost. We call for an extraordinary budget, crisis management tools and for the
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validity of the planting and replanting authorisations to be extended until 2022. The positive
outlook is expected to help the sector to offset some of the losses. Nevertheless, exports in April
were lower compared to the previous year, both in terms of volume and price.
Pigmeat, poultry and eggs
Pigmeat production is stable. Farm gate prices are far from satisfactory due to high production
costs. With better weather and restaurants being open, demand is growing (e.g. barbecue
season). Export demand remains strong and is up 30% on last year. While the poultry and egg
market seems to be stable except for the usual yearly fluctuations, production costs are high.
Given the severity of the second wave of avian influenza, some countries/regions have still not
lifted the veterinary order to keep free-range birds inside (> 7 months). This has an impact on
the price for which farmers can sell their produce.
Dairy
Production compared to 2020 is decreasing in most commodities except for condensed milk and
cheese. The EU raw milk price is stable compared to last month (+0.1%). Butter, SMP and WMP
prices are increasing (+1.4%, +1.2%, and +0.4% respectively). While EU exports for cheese, SMP
and WMP are increasing, EU exports for butter are decreasing (-13%), compared to 2020.
Beefmeat and sheepmeat
The impact of COVID-19 has been clear in premium cuts and veal (food service channel). The
market is therefore expected to readjust to a potential return to normality. However, the post-
2020 reality of Brexit has added a layer of complexity to the market.
Beefmeat prices are increasing in most carcass classification categories compared to last year
(average A/C/Z-R3 +8.1%; beef type male rearing calf +18.9%). With regard to production, the
number of slaughterings is decreasing; overall bovine meat production has decreased by 9.7%
compared to 2020 (Jan-Feb). Beefmeat imports have temporarily decreased compared to both
2020 and 2019. Export levels are very similar to those in 2020 and higher than those in 2019
(Jan to March).
Prices are clearly increasing compared to last year for both heavy lamb (+20.3%) and light lamb
(+15.5%). Sheepmeat production has decreased by 14.4% (Jan-Feb 2021) compared to the same
period last year. Exports have increased by 24% on average compared to Jan-Mar 2020 while
imports have temporarily decreased by 19% during the same period (-23% NZ, -44% AU, -41%
Argentina).
Olive and Olive Oil
Olive oil production is expected to increase by 10% in 2021. EU prices are steadily moving
upwards, despite still being below the five-year average. Household consumption has increased
as people cooking at home preferred olive oil to other oils. Exports are expected to increase
slightly, given a significant drop in production in third countries and thanks to the suspension of
the US tariffs. The US additional duties on Spanish ripe olives remains unresolved, costing
Spanish producers millions in terms of export losses and legal fees.
Spirits
The spirits market varies considerably from one country to the next. While in some countries the
market is quite stable with household consumption rising, a significant drop in production and
sales, for both premium and standard products, has been observed in others. Exports and
imports have also dropped. The reopening of the food service sector provides a positive outlook.
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