2012-05-17 07:32:28 - Recently published research from Business Monitor International, "France Agribusiness Report Q3 2012", is now available at Fast Market Research

BMI View: We expect lower production growth for French grains in 2012/13, as cold snaps have destroyed parts of the wheat, barley and corn plantings. In addition, the recent decision by the country's agriculture ministry to renew the ban on genetically modified Monsanto corn plantings for another year will limit the country's corn yields in the medium term. For dairy, the recent decision by the European Commission to allow contracts between producers and processors is expected to increase visibility for French farmers and support production growth in the coming years. For livestock, droughts and falling margins have continued to prevent growth in herds, which will limit meat production in the medium term.


Full Report Details at
- www.fastmr.com/prod/384862_france_agribusiness_report_q3_2012.as ..


Key Forecasts

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Corn production growth to 2015/16: 29.2% to 17.8mn tonnes. Growth in corn output is primarily owing to base effects, as there was a significant drop in production in 2010/11 saw a big drop in output. Production growth is expected to be subdued as the country continues to ban Monsanto corn plantings.
* Cheese consumption growth to 2015/16: -3.8% to 1.5mn tonnes. Although cheese is an important part of the French diet, we expect a slight fall in consumption over our forecast period as healthy eating concerns cause consumers to reduce the amount of cheese in their diets.
* Poultry consumption growth to 2015/16: 5.8% to 1.7mn tonnes. Poultry's perception as a healthy alternative to red meat, as well as its affordability in the sluggish economic environment, will encourage demand growth.
* 2012 real GDP growth: -0.2% (down from 1.8% in 2011; forecast to average 1.4% over 2011- 2016).
* Consumer price inflation: 1.3% annual average in 2012 (slightly up from 1.0% in 2011).
* BMI universe agribusiness market value: 10.5% year-n-year (y-o-y) decline to US$47.4bn in 2011/12, forecast to average US$49.1bn between 2010/11 and 2015/16.

Industry Developments

Our lower forecast for wheat production in the EU in 2012/13 is based on revisions to our France, Spain and Poland forecasts on the back of losses during plantings - a result of adverse weather conditions. We now forecast French wheat production in 2012/13 to increase only 2.3% y-o-y to 36.0mn tonnes (compared with 37.3mn previously) as winterkill hit 5-20% of the winter grains area, leading to significant losses for the country. We have revised down Polish wheat output to 9.0mn tonnes, a 3.0% fall compared with 2011/12 as similar cold snaps affected plantings. We now forecast Spanish wheat output to decline 13.1% y-o-y to 5.6mn tonnes as insufficient rains in the country have prevented grains from growing normally.

Dairy processor Lactalis, owner of several dairy brands sold in France, including Lactel, President and Galbani, has agreed to comply with recent changes in European dairy sector regulations. After months of tensions between Lactalis and dairy suppliers, the processor agreed the new contract rules, which require dairy processors to negotiate their supply contracts with producers. The reform also fixes volume, prices and quality for milk purchases, which is likely to provide farmers with better control over their revenues. The Schmallenberg virus has been detected in France after affecting livestock in Belgium, Germany, the Netherlands and the UK. Some cases have been reported in Normandy. The virus is similar to other animal disease pathogens which are transmitted by vectors such as midges, mosquitoes and ticks. It has caused brief mild/moderate disease (milk drop, pyrexia, diarrhoea) in adult cattle and late abortion or birth defects in newborn cattle, sheep and goats. There has not yet been evidence that the disease came from imported cattle, but more information is expected to become available in the coming months.

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