Due to growing world population and changing dietary habits, especially in developing countries, the demand for agricultural products, (particularly for milk and meat products) has grown considerably in recent years and forecasts predict that this trend will continue in the future.
Meat and dairy products consumption
But does that actually mean bright prospects for milk and meat producers as rising demand leads to higher market prices and therefore increased farm incomes? Unfortunately, things are not quite so simple.
The pressure on farmers increases and they are faced with rising input costs: fuel, fertilizer, plant protection products, concentrates (grain, soya) and land rental etc. In addition, commodity markets face high volatility so leading to greater uncertainty and making forward planning more complicated.
World Market prices
Source : Bloomberg; US Department of Agriculture; World Bank.
Milk prices evolution
Source : Agriculture and rural development - European commission