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Growth in Italian Poultry Meat, Pig Sectors This Year

by 5m Editor
9 July 2010, at 10:27am

ITALY - The output of poultry meat will rise by almost four per cent this year, according to a new report on the country's agribusinesses.

While 2009 saw a relatively weak performance in terms of volume of agricultural produce for Italy, the situation is expected to improve. Low milk prices in Italy and Europe in general are beginning to rise, as are grains prices. A much more impressive grains harvest is expected in 2010, with healthy gains forecast for wheat, corn and barley.

Among the key points in Italy Agribusiness Report Q3 2010 from Companies and Markets, wheat forecast for 2009/10 growing season increased in the second quarter (Q2) of 2010 following encouraging reports of growing conditions, particularly water availability. Wheat production now expected to come in at 7.26 million tonnes, up 14.5 per cent year-on-year (y-o-y).

Pork production is expected to expand 5.6 per cent over our five-year forecast period from 1.55 million tonnes in 2009 to 1.64 million tonnes in 2014. Output is currently aided by low grain prices, though downside risk lies in the prospect of another grain price bubble.

Following protracted negotiations, prices paid to Italian producers in Lombardy, the leading milk producing region, have been fixed at €33.16 per litre from January through to June 2010. The report's authors expect milk production in 2010 to come in at 12.2 million tonnes, increasing to 12.6 million tonnes by 2014.

Industry developments

High-Level Expert Group (HLG) on milk set to report at the end of June 2010. Conclusions may include boosting farmers' bargaining power by establishing contractual arrangements between them and the dairy processing industry and exempting farmers from competition rules to bargain collectively. The recommendations are expected to shore up flagging dairy industry in EU markets.

Low feed prices and a weak euro are currently working in favour of Italian poultry producers. For 2010, the report says that expansion is expected to continue, with production growth of 3.9 per cent to reach 1.19 million tonnes forecast. However, rising costs and a continuation of the recession would make this forecast appear optimistic.

Further Reading

- You can view the full report (fee payable) by clicking here.