ECON(15)4384:1 – FB/jg
June 2015
Results of the multi-national farmers' confidence index – 2015Q1
A MILD UPSWING IN THE MOOD OF FARMERS BUT
UNCERTAINTIES LOOM AHEAD
I.
Changes in confidence in aggregate
A survey carried out in ten EU Member States1 between January and April 2015 revealed that
the mood among farmers has slightly recovered since the autumn of 2014, when confidence
plummeted, but farmers remained very cautious (chart 1). In most of these countries, the return
of trust was driven by prudent hopes for the future while the opinion on the current situation
remained critical. The index was still below the level of 12 months earlier.
Due to record supplies of agricultural products in 2014 and the recovery of stocks worldwide,
prices of agricultural products in general fell.2 In Europe, this situation continued to be
exacerbated by the Russian embargo. Cheaper oil prices eased somewhat energy-related inputs
but, as output prices also fell, the profitability of farming was compromised. A weaker euro
temporarily facilitated EU exports to third countries.
The Copa-Cogeca confidence index is calculated twice per year on the basis of the results of
national surveys carried out amongst over 8,000 farmers on two questions concerning how
farmers assess the current and expected economic situation of their farms.3 The next issue will
be published in autumn 2015.
Chart 1 – EU-10* confidence index development
* The Netherlands has been included since 2012Q3.
The index can fluctuate between -100 (farmers unanimously pessimistic) and +100 (farmers unanimously
optimistic).
Compiled by Copa-Cogeca using national data
Belgium (Flanders), Germany, France, Italy, Hungary, the Netherlands, Poland, Romania, Sweden and
the United Kingdom (England and Wales).
2 In May 2015, FAO’s Food Price Index reached its lowest level since September 2009.
3 For more information on the method, please see the document ECON(11)576 (rev.6). Please note that
Copa-Cogeca’s method may vary from those used in national barometers; therefore, figures in this
document may not be directly comparable with national data.
1
Copa - Cogeca | European Farmers European Agri-Cooperatives
61, Rue de Trèves | B - 1040 Brussels | www.copa-cogeca.eu
EU Transparency Register Number | Copa 44856881231-49 | Cogeca 09586631237-74
II.
Prospects per country
Sweden
Sweden is the country where the survey was first run (January 2015). After reaching its lowest
value in the third quarter of 2014, overall confidence recovered somewhat on the back of better
current and future expectations, but farmers still considered their profitability as poor.
Against a background of generally low agricultural prices, bigger farms in terms of revenues
across all sectors were more optimistic about their profitability than smaller ones. Dairy farmers
were the most pessimistic. Only the pigmeat sector continued to experience good prices and
increasing internal demand, thanks to consumers’ preference for national products for its focus
on animal welfare and restrictive use of antibiotics.
In 2014, weak profits resulted in less investments in farm machinery and building and intended
investments will also be delayed this year. Young farmers (below 40 years) were more willing to
invest than older farmers, in machinery in particular.
Chart 2 – Sweden
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
United Kingdom
Following two consecutive drops, the mood of farmers in England and Wales went up again in
March 2015, lifted by better views of the present and future situation. In particular, mediumterm confidence reached its highest point while current confidence was below one year ago.
Arable, dairy and mixed sectors recorded a negative short term confidence, possibly driven by
downward farmgate prices expectations. Horticulture was already positive and further
improved. Confidence in the beef and sheepmeat sectors recovered from six months before,
while pigmeat farmers were less optimistic than in December. Poultry and eggs producers in
particular were very positive about the present and the future situation.
Only 1 out of 5 farmers expressed a positive opinion on the CAP. And when asked about Britain’s
EU membership, 42% of respondents thought that it was a good thing.
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Chart 3 – United Kingdom (England and Wales)
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
Italy
Counting on little, but recognised, signs that the Italian economy would exit the recession and
internal demand would start growing again, in March 2015 farmers’ expectations for the future
went up and the overall mood of farmers reached its highest level. However, the present
situation was still considered critical as profitability was squeezed by the cost-price scissors.
The current situation was perceived as bad across all products except wine. The fruit sector, in
particular seasonal products such as apples, pears and kiwis, was still suffering from marketing
problems. Dairy farmers were affected by low prices and external competition. However, the
exports of some Italian PDO cheeses (like Parmigiano Reggiano, Grana Padano, Pecorino Sardo)
performed well.
15% of farmers reported very significant or fairly significant problems while running their
activity in the first quarter of 2015 – among them, mainly dairy and fruit producers (chart 12).
Low prices, high costs and a 2014 marketing year affected by bad weather conditions were
mentioned by around one in every four farmer having encountered problems. Red tape was also
mentioned by 17% of these farmers.
Chart 4 – Italy
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
France
French farmers’ views on their present situation have stabilised over the past six months at a
level considerably less optimistic than a year ago. When looking at the next two to three years,
fewer farmers were worried about their future economic situation than in the autumn survey;
nonetheless, long-term confidence remained weak. All in all, the national confidence index
recovered but not as much as to compensate for the previous drop.
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The share of farmers who reported facing difficulties seems to have stabilised around 40%. This
is 10 percentage points below the peak reached in the spring of 2010. Prices and costs were
indicated as the major problems encountered in the first months of 2015, especially by
producers of beefmeat and arable crops. The regulatory framework came third in the ranking
and it was raised by dairy and wine producers in particular, probably in reference to the expiry
of the dairy quotas and vine planting rights respectively.
As in previous surveys, farmers’ views on the economy in general moved in parallel with their
views on the situation of their own activity, with the first one being seen with more pessimism.
In this wave, farmers’ opinion of the economy and their business improved but they remained
predominantly pessimistic.
Chart 5 – France
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
Romania
In March 2015, the overall sentiment of Romanian farmers improved compared to the autumn
and it reached almost the same level of a year before. The appraisal of both the present and the
future improved but the rating of the current economic situations was below the one of March
2014.
Since the autumn, better prices for cereals and oilseeds and lower energy costs lifted the mood of
field crop farmers. On the other hand, decreasing prices of milk, beef and pork saddened
livestock producers. Despite improvements in some commodities, the level of agricultural prices
remained unfavourable in general.
Better confidence for the next two/three years was driven by expectations of increase of
productivity and new technology for machinery as well as prospects of a good harvest. On the
contrary, pessimists felt uncertain about the development of public subsidies and the
agricultural policy. The future price of milk and beef were also a matter of concern.
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Chart 6– Romania4
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
The Netherlands
After reaching its lowest level since the first edition of the barometer, confidence in the
Netherlands increased over the winter but was still lower than at the same time last year. This
was caused by a recovery in confidence in both the present and future across all sectors.
Cereal and dairy farmers were the most optimistic when judging the present situation, thanks to
good output, but they were the most pessimistic for the future, due to expected high costs.
Poultry farmers remained content with the present and future situation of their business.
Pigmeat producers instead were struggling with costs and low margins. Open field vegetables
present confidence reached its bottom level in four years, due to low prices for onions and
carrots, but the hopes in the future were more widespread than in any other sector. Finally,
greenhouse horticulture saw prices improve and costs for energy decline.
Chart 7 – The Netherlands
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
Flanders
The Flemish barometer stabilised around the bottom level reached six months before, as
perceptions of the current situation continued to deteriorate; however, farmers predicted a less
difficult future.
Confidence in the crop sectors improved while the mood of livestock farmers worsened,
reflecting lower output prices. Still, confidence across all production types was negative except
for vegetables under greenhouses. Since October, the opening of new market outlets and
compensatory measures by the EU for the Russian ban have helped pigmeat and fruit and
The survey in Romania was carried out amongst farmers who farm more than 60 hectares.
Approximately 85% of these were involved in arable production and 15% in milk production.
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vegetable growers revive their fortunes. Lower energy prices encouraged flowers and vegetables
under greenhouses.
When asked about any difficulties running their farm, one third of the interviewed farms had
faced no difficulties at all. This is 10 percentage points more than in the previous survey. Once
again, the most cited problem referred to by the other respondents was government-imposed
constraints.
Chart 8 – Belgium (Flanders)
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
Germany
After a year of downturn, the mood of German farmers stabilised at a lower level than the past
three year average. This was the result of diverging views on the present and the future situation.
Intended investments were affected by this disheartenment and stood at €1 billion less than the
same period of the previous year. This decline is worrying because investment and innovation
are necessary for the further development and competitiveness of agriculture.
The factors which negatively influenced the economic development of the farm were the price of
rented land, operating costs (fertilisers, energy, feed and seeds) and output prices. Indeed,
cereal, milk and pigmeat prices recorded at the beginning of the year were considerably below
the previous year’s level. Farmers were also sceptical about policies, in particular national and
EU agricultural policies. The price of beefmeat, the expectations of the harvest and lending
conditions in general were perceived as relatively favourable.
Slightly fewer farmers (9% compared to 12% last autumn) declared that they had faced fairly
significant or very significant problems in the previous three months.
Chart 9 – Germany
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
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Hungary
The agricultural business barometer in Hungary increased a little compared to the autumn but it
remained well below the long-term trend.
Short-term confidence went up thanks to better prices for crops and lower energy costs
compared to the previous survey. Nevertheless, output prices in general were considered low. In
particular, milk and meat prices have been falling in the past six months. The grim outlook for
prices was also expected in the future. Due to unfavourable prices, bigger quantities of cereals
had been stored than one year before. Credit conditions were the only factor which was seen as
positively affecting the sector. As the cereals harvest got closer, expectations were somewhat
placated, as were the ones concerning the accessibility of subsidies.
Chart 10 – Hungary5
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
Poland
Poland is the only country where confidence continued to weaken, reaching a new low, with
worsening views on both the present and future compared to six months before.
The evaluation of the current economic situation by field crop farmers was satisfactory, but
stocks of cereals were slightly fuller than one year before due to lower prices. Livestock farmers
rated their current situation as unfavourable due to poor selling prices and geo-political
uncertainties. Contrary to Hungary, subsidies were quoted as a reassuring factor.
When looking at the future, pigmeat and poultry producers were so discouraged that they hoped
the situation could only get better. All the other sectors were predicting even lower prices for the
next two to three years.
Chart 11 – Poland6
Economic situation of the farm
National confidence index
Compiled by Copa-Cogeca using national data
5
6
The survey in Hungary was carried out amongst farmers who farm more than 200 hectares.
The survey in Poland was carried out amongst farmers who farm more than 30 hectares.
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Chart 12 – Answers to the question “have you had any problems/difficulties whilst
running your farm during the last three months?”
* 2 options: yes/no
Compiled by Copa-Cogeca using national data
Disclaimer
Copa-Cogeca would like to thank the Department of Agriculture and Fisheries of the Flemish
government, the German Farmers' Association (DBV), the Fédération Nationale des Syndicats
d'Exploitants Agricoles (FNSEA), the Istituto di Servizi per il Mercato Agricolo Alimentare
(ISMEA), the German agricultural machinery association (VDMA), LEI – Wageningen UR and
LTO Netherlands, Lantbrukarnas Riksförbund (LRF Konsult) and the National Farmers’
Union of England and Wales for kindly providing their data for us to use as well as the
farmers who took part in the survey. However, Copa-Cogeca alone is responsible for
processing the data, as presented.
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