Agricultural market outlook: scope on global and Polish markets

Read our report on the global agricultural markets with detailed insight into the situation in Poland. We take a closer look at the sectors including grains, livestock, and dairy. See the latest production numbers, recent price changes, and market outlook according to the experts.

The economy is still recovering after the pandemic caused an unprecedented impediment on a global scale. After months of obstacles affecting agricultural production and international trade, the market is recuperating but further challenges lay ahead. In our report, we investigate the global agricultural situation and take a closer look at the Polish market as well.

Global grains market

Recent projections estimate that the global grains production will reach 2,283.3 million tonnes in the marketing year 2021/2022 – up by 3.2% from last season. In the 2021/2022 season, wheat production is forecast at 780.28 million tonnes up from 775.83 million tonnes in the previous marketing year. Higher wheat yields are expected in the European Union – an increase of over 10% and in Ukraine by almost 30% compared to last season. India, China, and Australia also expect higher wheat output with the latter possibly breaking the third-largest record at 31.5 million tonnes of wheat produced in one season.

A decreased output will likely be noted in the U.S. – down by 7%, in Canada by almost 35%, and in Russia by 15%. Despite increases in wheat production, global consumption is still rising and the estimated wheat consumption for 2021/2022 is 789.6 million tonnes.

In the upcoming season, global corn yield is projected at 1,197.77 million tonnes up from 1,117.11 million tonnes in the marketing year 2020/2021. Higher numbers are expected in Ukraine – up by almost 30%, by 6% in both Argentina and the U.S., and in China by almost 5%. Reductions are projected for corn harvest in the Southeast Asian region. China is expected to increase its use of corn in the animal feed sector.

At the same time, global soybean production is expected to reach 384.42 million tonnes up from 363.27 million in the previous season. Higher output is forecast in the U.S. and Argentina while reduced numbers will most likely be noted in Brazil and Paraguay. In the marketing year 2021/2022 the consumption is expected to be higher than the production rates causing the global grains supply to decrease by 4,5 million tonnes from last year to 589,2 million tonnes. Experts predict that grain prices will be raising in the upcoming seasons caused by unfavorable weather conditions during harvest.

Polish grains market

Recent updates on the grains production in 2021 in Poland are raised to 32,136 million tonnes – 3% higher than the 5-year average but still 7% below last year’s numbers. Except for wheat and rye, the expected yields are raised for all grains. Wheat production is expected at 10,75 million tonnes. However, corn harvest is expected to break the record at 6,8 million tonnes due to the expansion of the crop area to 992,000 hectares – a year-to-year growth of 66%.

Global cattle, swine, and poultry market

The prices for swine are decreasing due to lower demand for pork imports in China. The country is recovering its pig count after tackling the ASF outbreak. Experts predict that the prices will continue to decrease until 2022 on reviving demand from the HoReCa sector and lower pig count in the EU. The prices on the global cattle market have been varying in the past weeks. In Australia, a major cattle exporter, the prices for deadweight cattle are increasing with the latest numbers in September at over $ 7.50 per kilogram compared to around $ 5.70 a year before and below $ 3.50 in 2019. At the same time, the prices per kilogram of deadweight cattle in Brazil have slightly decreased to around $ 3.90 after a spike in July. In New Zealand, the numbers are continuously growing since March to the latest price at almost $ 4.50 per kilogram of deadweight. In the past months, the prices for liveweight cattle have been increasing in the U.S., Paraguay, Uruguay, Argentina, and Great Britain among others.

Since the beginning of 2021, international prices for poultry have been spiking due to a limited supply caused by the HPAI outbreak. The production is slowly recovering and prices in August have been moderating. Experts predict that poultry production will continue to grow but the prices will decrease quite slowly as the EU demand for poultry is recuperating, especially in the HoReCa sector.

Polish cattle, swine, and poultry market

In Poland, in the first seven months of 2021, the year-to-year value of pork exports decreased by 4,6%. The profitability of the production is also decreasing as feed costs rise. However, Polish prices for cattle are skyrocketing – the supply is shortening while international demand stays strong. Between January and July 2021, the year-to-year value of Polish cattle exports grew by 8,9%. The increase of prices for cattle has surpassed the spike in feed costs thus improving production profitability. Experts predict that higher production in 2022 will result in lower cattle prices. The Polish poultry market suffered significant losses due to the abrupt decrease in demand during 2020 as well as due to the outbreak of the bird flu causing the utilization of 14 million animals in 2021.

However, the situation is stabilizing while the value of the Polish poultry export market is increasing and returning to the pre-pandemic level. In August, the increases in prices for poultry surpassed the spikes in feed costs thus improving the production profitability. Experts predict that the poultry prices will decrease while the production will increase only moderately due to the growing feed costs.

Global dairy market

Increased supply of milk contributed to the lowered prices for dairy products in June and July 2021. However, the latest data shows the recurrence in price increases for dairy goods, especially for whey – a year-to-year growth of over 31%, SMP up by almost 19%, and butter increasing by almost 16%. Between January and August 2021, milk output from key global producers has slightly increased. The U.S. noted an output of 69.34 million tonnes – up by 2,2% from the same period last year. Similarly, Argentina produced 7.24 million tonnes – a growth of almost 4% while milk production in Australia increased by 4,1% to 10.67 million tonnes.

Key dairy producers from the southern hemisphere already noted significant increases in milk production but the peak season is still to come. In the EU, between January and July 2021, total milk delivered to dairies equaled 87.049 million tonnes – down by 0,1% from the same period last year. The average price for milk in the EU has been continuously growing since the beginning of 2021. The latest average milk price for EU-27 was noted in August at € 35,97 per 100kg compared to € 33,08 per 100kg in the same month last year.

Polish dairy market

In the first half of 2021, Poland has increased its production of cheese by 2,7% as well as yogurt and WMP by 1,7% and 1,6% respectively compared to the same period last year. The production of other dairy goods decreased, especially for SMP by 8,2%. However, Polish deliveries of fresh and packaged milk to extra-EU partners have increased significantly, namely to Ukraine, China, South Korea, and South Africa. Experts predict that the milk prices in Poland could slightly increase due to the limited supply and competition between dairies.