The European Commission has issued a stark warning to beef farmers in its agricultural market outlook until 2030.
Following growth in the past three years, "production is expected to decrease again, influenced by the shrinking cow herd, low profitability, declining beef demand and strong export competition despite the opening of niche markets", the EU forecasts.
The Commission expects beef prices to fall in the next few years, before stabilising until 2030.
EU consumers are forecast to continue switching to poultry, which should see production expand by 4% over the next 12 years, with exports also growing.
Sheep markets are expected to "recover slightly" with improved returns for producers. Declining pigmeat consumption in the EU should be balanced with export growth.
Pasture-based dairy growth
Growing population, especially in Africa, will drive demand for dairy products. Meanwhile, EU consumers will continue to eat more cheese and differentiated products, with "pasture-based" identified as one of the growth categories.
The Commission forecasts a 0.8% annual increase in EU milk production over the next decade, largely thanks to growing yields.
"However, this will be at a slower pace than in the past decade, given environmental constraints and the extensification of production in response to consumer expectations," it warned.
Stable grain prices
The most significant change on tillage farms will be the development of local feed and protein crops, according to the forecast: "Strong demand both for feed purposes and for human consumption, as well as the supportive policy environment, will further drive production growth of soya beans and protein crops."
However, this will remain a small part of the sector. Cereals and oilseeds are seen to remain stable over the next decade, with base grain prices close to €170/t.
Overall farm incomes are forecast to remain static as a 17% increase in farmgate prices will be absorbed by a similar rise in production costs.