Global agricultural market trends and their impacts on European Union agriculture

The economic, political and climatic conditions in which farmers around the world have to make their production and investment decisions are changing dramatically. This study analyses the driving forces of changes in agricultural world markets and their implications for European Union agriculture for the time period 2003/05 - 2013/15. The impacts on European Union agriculture are quantified using of a multi-market-model. The mega-trend of declining world market prices has ended. Since the turn of the millennium world market prices for agricultural goods have been increasing. This trend can be expected to continue. Not only will prices have a tendency to increase, but also fluctuations of agricultural world market prices are likely to be higher in the future than they have been in the past. The reason for the positive trend in agricultural world market prices is that global demand growth outstrips the growth in global supply, and this trend will continue in the foreseeable future. The global demand for food will continue to grow mainly for two reasons. One is the continued growth in world population; the other is the sustained growth in per capita incomes in developing and newly industrialised countries, with corresponding increase of per capita food consumption. ...