September Agricultural Markets Preview

With the end of the holidays, the demand increases

The main holiday season in Germany is coming to an end, and with consumers returning from vacation, the demand for agricultural products is gradually increasing. The processing plants are also resuming production. The growing sales are causing prices to stabilize in some areas. On the slaughter cattle markets there could be slight premiums, especially for young bulls. Egg prices are likely to bottom out somewhat, and the price recovery in the turkey market is likely to continue. Slightly rising courses are also to be expected for cheese. Cows and pigs, on the other hand, are valued slightly lower than they were in mid-August, but still higher than a year ago. There are hardly any changes in chicken, butter and skimmed milk powder. And the demands for potatoes will probably only move a little. The fall in prices on the grain market is likely to come to a standstill. Despite another below-average apple harvest, an overall plentiful supply of fruit can be expected in September. Vegetables are also usually available in large quantities.

Slaughter cattle prices above previous year's level

The supply of young bulls, which has been limited for months, in conjunction with constant demand from the slaughterhouses, ensures continued firm prices, although the lowest prices of the season are usually realized in the summer months. In September, the beef business should be boosted by consumers returning from vacation. Further slight price increases for young bulls cannot therefore be ruled out. However, due to the already comparatively high price level, there will not be any significant surcharges.

The meat processing industry resumes cow meat in September. At the same time, the grazing could be delayed somewhat, since the farms are still well supplied with their own basic fodder. The supply of cows for slaughter is therefore expected to increase only slightly, and producer prices should remain at a relatively high level. With an estimated 1,90 to 2,00 euros per kilogram slaughter weight, however, cows in class O3 would bring in a little less than in mid-August.

The demand for pork is livelier than in August, the main holiday month. In addition, the pork market will be relieved by meat deliveries to the new EU countries. Trade with these countries is likely to become increasingly important. Added to this are steady exports to Russia. Producers will earn an average of EUR 1,45 to 1,50 per kilogram slaughter weight for class E pigs in September, which would be slightly less than in mid-August but more than twelve months ago.

Poultry needs, eggs plentiful

A demand-covering supply can be expected on the poultry market. Demand continues to focus on barbecue items, while the rest of the range is likely to come to the fore again. The processors are also buying more. Chicken prices are expected to change little in the coming weeks, while turkey prices should continue to recover. However, the previous year's level is still slightly missed.

Eggs are widely available across the EU. In the case of caged goods as well as barn eggs, oversupply cannot be ruled out, although consumer demand is increasing after the end of the main holiday season. Exports can continue to be made to third countries. Egg prices are recovering somewhat, but remain comparatively low.

Livelier dairy business

Depending on the time of year, milk deliveries to German dairies continue to decline and are still lower than a year ago. With the end of the holiday season, demand in all areas of the milk market is picking up. The prices for butter and milk powder change only slightly and are therefore slightly above the previous year's level. Cheese prices are rising slightly, but semi-hard cheese is still valued lower than in 2003.

Potato storage relieves the market

The supply of potatoes from the current main harvest is likely to be significantly larger than last year. The quality is consistently good. Farmers are already storing up some of the current harvest for the winter in September, and storage campaigns are underway in retail. This should relieve the market somewhat, especially since demand for ongoing needs is increasing at the same time. The peeling area also requires more goods. The producer prices for table potatoes are stagnating at a low level. Predominantly waxy and mealy varieties hardly reach the mark of six euros per 100 kilograms.

Good grain harvest

If the weather continues to be favourable, the grain harvest in Germany should be completed as early as August. On the other hand, weather-related delays are becoming apparent in Northern Europe. Although the supply of wheat in particular is very plentiful throughout the EU, the situation is much more differentiated in the individual quality segments. In view of the generally positive harvest expectations, the interest of processors is concentrated on the manageable front demand. After the sharp drop in prices for grain for all types of use during the harvest phase, the trend could calm down somewhat in September. Overall, however, grain prices are below the previous year's level.

A lot of fruits and vegetables

According to the estimates compiled at this year's Prognosfruit Congress, the 2004 apple harvest in the EU-15 will total almost 6,9 million tons. That would be four percent more than in 2003. In most countries, the harvest will be slightly higher than in the previous year, but lower than the long-term average, including Germany. The pear harvest will increase in almost all European countries. For the EU-15, production is estimated at 2,45 million tons, which would be eleven percent more than in the previous year and eight percent more than the multi-year average.

The German blueberry season ends in September. The soft fruit range is supplemented by autumn raspberries. The plums are about to be harvested for the mid-late and late varieties, which together make up around 65 percent of the total. The harvest is likely to be significantly larger than last year.

After a XNUMX week period of very low prices, the lettuce market is beginning to stabilize. In view of the very weak demand to date, it remains to be seen whether there will be any significant price increases. The situation with mixed lettuce is similar to that of lettuce. A balanced market for iceberg lettuce can be expected in September after a six-week low price phase.

The supply of bush beans is already falling significantly in the coming month, and the demands are likely to bottom out. Head cabbage has grown optimally in the past few weeks with favorable weather. Yields should be above average. Increasing pressure on producer prices is therefore to be expected for white and red cabbage. Cauliflower and broccoli, on the other hand, are available in smaller quantities in September than before, and prices are rising slightly. Supply pressure has built up for carrots due to the growth-promoting weather conditions. In the neighboring countries, too, there are indications that the harvest will be mostly good, so that the market throughout Europe is likely to remain under pressure. Onions come onto the market in abundance and at low prices.

Source: Bonn [ZmP]