By contrast, the skimmed milk powder (SMP) price is expected to remain around current levels given the high stock levels and that the seasonal peak of milk collection is still to come. Low cereal prices were driven by abundant world supply and stocks. By contrast, EU cereal production declined by 5.5% in 2016/2017, following smaller-than-average soft wheat and maize harvests. This should result in a slowdown in EU cereal exports. EU rapeseed harvest was also below average but, given the large world oilseed supply, this only resulted in a small price surge.
EU sugar prices are catching up with high world prices. As for olive oil, low 2016/2017 production (13% below average) together with low stock levels resulted in higher prices.
EU meat production reached a record level in 2016 but is showing signs of downward adjustments. Sustained pig meat exports to China facilitated a recovery in the EU price. Continued good beef exports held EU price decreases in check. The production of sheep meat is growing at a slower rate, on the back of lower prices.
The full report is available online.