The latest set of medium term projections for OECD Agriculture to 2008 suggest divergent market prospects for the crop and livestock sectors in the near term. Reduced global crop supplies as a result of droughts in North America and Australia and some rundown of world stocks, have led to sharply higher cereal and oilseed prices at the start of the Outlook. These prices are expected to decline initially as production rebounds and then firm slowly over the period to 2008, with strengthening demand…

Agricultural markets operate within the overall economy. Consequently, they not only react to factors that are specific for agricultural commodities but to macroeconomic variables such as income growth, inflation, interest rates and exchange rates. Agricultural markets are also affected by the policy context within which they operate. This section presents a brief summary of key macroeconomic developments during 2002 and expectations of developments over the Outlook period. In addition, some of the key agricultural policy developments are discussed.

Current wheat and coarse grain markets are significantly influenced by extraordinarily low harvests in a number of major producing areas. Droughts in North America and Australia, together with the economic disturbances in Latin America, have resulted in the fifth year in a row of declining global wheat crops (see Box 2). Coarse grain production also significantly declined from the preceding year. At the same time, with consumption hardly being reduced, global stocks have been reduced by another 29 and 33 million tonnes, respectively, with coarse grain stocks at their lowest level since 1983…

The Outlook projections assume that there will be normal weather. This assumption is necessary to generate a set of baseline results that can be used to understand market trends and also can serve as a basis for policy analysis. At the same time, it is widely understood that weather will not, in fact, be normal. Here, we investigate some implications for cereal markets by reporting on preliminary, partially stochastic work resting on random yield variations.

Persistent weather difficulties have reduced supplies, creating pressure for higher prices for oilseeds and oilseed products in world markets. Moreover, after world oilseed stocks fell from over 9% of use in 2000 to only about 7% in 2001, much more significant rises in prices in 2002 were required to reduce stocks further towards 6% of use and to restrict consumption. However, the medium-term outlook is not dominated by current weather; weather is assumed to return to average. As such, with yields back at trend levels and area planted growing in response to recent high prices, world oilseed production should rise by 18% over the period…

In the following assessment of the major forces driving agricultural policy and trade in Ukraine in the coming years, we begin with a brief assessment of Ukraine’s comparative advantage in agriculture. This is followed by a discussion of the main macroeconomic, sector- and product-specific factors that will influence Ukraine’s future agricultural trade and development. We close with some simple projections of Ukraine’s future production and trade in grains.

Relatively low world prices, by historical standards, during consecutive seasons prior to the start of the Outlook are expected to stimulate global consumption of sugar and slow production in some countries open to world markets. This should lead to a pick-up in world sugar prices in the early years of the Outlook as consumption outstrips production growth and begins to eat into the large global stockpile of sugar overhanging the market...

Throughout the Outlook period, slower growth is expected in per capita real incomes in OECD countries, relative to the pace of the late 1990s. Globally, growth in meat consumption should slow down, particularly for red meats which tend to be more responsive to changes in incomes and, moreover, are experiencing a long term decline due to changes in consumer preferences. This decline in demand has mostly been driven by health concerns and has been accelerated by the recent outbreak of Bovine Spongiform Encephalopathy (BSE) and foot-and-mouth disease (FMD) in some countries. This trend towards lower red meat consumption is expected to be exacerbated by the slowdown in income growth in OECD members relative to the 1990s. Despite relatively weak demand growth, beef, pig meat and poultry prices should exceed the very low 2002 levels by 2008…

Following the sharp rise in 2000 and 2001, world dairy prices started to fall rapidly as a consequence of high supply and reduced consumption, especially in Asia. By mid-2002 prices had plunged to their rock-bottom levels of the last decade. As demand started to react to very low prices, these started to firm up towards the end of 2002...

On 13 December 2002, Heads of State and Government from the EU and ten candidate countries reached agreement on a formula for enlarging the EU to encompass ten new member States as from 2004. Following the decision of the Copenhagen Summit, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, the Slovak Republic and Slovenia will join the EU on 1 May 2004....