Boston, MA -- (ReleaseWire) -- 12/21/2012 -- BMI View: We highlight that French wheat has become more competitive on export markets, mainly owing to a decrease in competitiveness for the Black Sea region. The French livestock sector is encountering more difficulties because of a squeeze in margins. For poultry producer Doux, for example, we expect the asset liquidation and restructuring to increase efficiency in the sector over the long term. In the dairy segment, producers are being hit by weak economic growth in Europe, but milk prices could help to support production growth in the coming years.
Strong Export Capacity
France - Wheat, Corn & Barley Production Balance ('000 tonnes) f = BMI forecast. Source: Agreste, BMI
- Barley production growth to 2016/17: 6.4% to 9.4mn tonnes. The positive figure is owing to base effects; with barley prices remaining low relative to wheat and intervention buying ending, production is likely to fall in year-on-year terms for most of our 2012-2017 forecast period.
- Milk consumption growth to 2016/17: -3.6% to 5.5mn tonnes. Elevated farmgate milk prices very likely have discouraged consumers from buying milk, especially given the recent period of slow economic growth. We expect this decline in consumption to continue, with more milk being used for other products and exported rather than being consumed domestically.
- Pork production growth to 2016/17: -2.3% to 1.9mn tonnes. Farmers liquidated part of their herds because of liquidity constraints on the back of high feed prices. Also, the application of EU welfare standards will hurt uncompetitive producers in the short term.
- 2013 real GDP growth: 0.6% (up from -0.2% in 2012).
- Consumer price inflation: 1.4% annual average in 2013 (slightly down from 2.2% in 2012).
- BMI universe agribusiness market value: 0.4% year-on-year (y-o-y) decline to US$47.7bn in 2012/13.
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A recent French experiment on the effects of genetically modified (GM) foods and pesticides has made anti-GM protesters more vocal on the potential dangers of the crops. The experiment, conducted by biologist Gilles-Eric Seralini from the University of Caen, studied the effect of feeding rats with herbicide-resistant GM corn or corn treated with the herbicide Roundup, on a large scale (200 animals) and over the long term (two years). The results showed that all the groups fed with either GM corn, Roundup-treated corn or both, presented liver or kidney failures after one year (1.3-5.5 times more frequent than for the control group). Also, 80% of males and 70% of females in the tested groups died prematurely. The study noted that there was no degree of proportionality between the doses of GM organisms and herbicides administered to the rats and the effects observed, which is often true when hormonal cycles are disrupted.
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