France Agribusiness Report Q2 2013 - New Market Research Report

Fast Market Research recommends "France Agribusiness Report Q2 2013" from Business Monitor International, now available

by Bill Thompson

(WireNews+Co) - Boston, MA - 21 February 2013

BMI View: We believe the grain sector in France will continue to outperform other agribusiness sectors in terms of production growth. This will be reinforced by ongoing reforms of Common Agricultural Policy subsidies that are likely to have more of an effect on dairy and livestock farmers, because they are often smaller than grain farmers. The agriculture minister's proposal to shift part of EU subsidies from crop farmers to dairy or livestock farmers could support production growth in the latter, even though we do not see this as sufficient to turn around current production trajectories for each sector.

Key Forecasts

- Wheat production growth to 2016/17: 12.7% to 40.6mn tonnes. We expect wheat to remain the most profitable crop in the country and the crop most in demand for domestic use and exports.
- Beef consumption growth to 2017: 3.8% to 1.78mn tonnes. Even though beef is very popular in France, we believe growth over the long term will be limited by high prices and already elevated per capita consumption.
- Milk production growth to 2016/17: 5.3% to 26.2mn tonnes. Over the longer term, we expect consolidation in the dairy industry to allow producers to take advantage of rising quotas and export demand. We also believe the European Commission's decision to adopt new legislation that allows producers to collectively negotiate contracts with processors will improve the profitability of milk production, in turn supporting output.
- 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: 0.7% year-on-year (y-o-y) increase to US$51.4bn in 2012/13.
- Competitive landscape: We are positive about Vilmorin, as the company's share price seems to be undervalued. We see tremendous long-term opportunities in the seeds markets, especially in markets such as the Middle East and Asia, where the company is developing.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/536446_france_agribusiness_report_q2_2013.aspx?afid=201) (http://www.fastmr.com/prod/536446_france_agribusiness_report_q2_2013.aspx?afid=201)

Industry Developments

The French agriculture minister's proposal to shift part of the subsidies received by crop farmers to livestock farmers could help to boost meat producers' income and present upside risks to our forecasts out to 2016/17. The proposal is meant as a response to the growing gap in incomes between grain and livestock farmers. In fact, French crop growers earned an average of EUR74,400 before tax in 2012 (40% higher than in 2011), while beef and dairy farmers saw their income plunge to EUR15,400 and EUR26,500 respectively (a 10% drop from 2011).

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