Supplementary memorandum submitted by
the National Farmers' Union (NFU) (CAP 12b)
FURTHER INFORMATION
ON GRAIN
MARKETS
1. At the oral evidence session on the inquiry
into the DEFRA/Treasury document "A Vision for the Common
Agricultural Policy", the Environment, Food and Rural Affairs
(EFRA) Committee expressed its interest in obtaining additional
information on the current situation concerning grain markets,
with special emphasis on the reduction of stocks experienced in
recent years.
2. The NFU highlighted in the oral evidence
session its belief that recent changes in agricultural markets
should inform any review of agricultural policies. The data below
confirms the reduction in stocks-to-consumption ratio in recent
years.
3. The grain market shows a marked decrease
in stocks in recent years, from a high of 423 million tonnes in
1998/99 to a forecast level of 243 million tonnes in 2006-07.
Figure 1
GRAINS—PRODUCTION, CONSUMPTION AND
STOCKS
Source: Historical data from US Department
of Agriculture, 2006-07 forecast from International Grains Council.
4. The concerns arising by the decreasing
level of stocks are further compounded by the increase in world
demand. Figure 2 (below) analyses the "stocks-to-consumption"
ratio, expressing it in terms of days' equivalent. While in 1986-87,
world grain stocks were equivalent to 128 days of consumption,
current forecasts estimate that by the end of the 2006-07 season
world grain stocks will be equivalent to 55 days of consumption.
The decline has been especially pronounced in recent years, with
the stocks-to-consumption ratio declining by 48% between 1998-99
and 2006-07.
Figure 2
GRAINS—STOCKS EXPRESSED AS DAYS' CONSUMPTION
EQUIVALENT
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