The now annual EU agricultural outlook conference was held as usual last week but in the now normal online format as opposed to the gathering in Brussels for the two-day event. The event coincides with the release of the outlook for agricultural produce publication, which gives a 10-year view on likely developments in each category of agriculture on an EU and global basis.

Dairy

EU dairy production is forecast to continue growing but at a slower rate to 2030, reaching 162m tonnes at a rate of 0.6% annually. As with the other sectors, sustainability demands are predicted to curtail production growth. Growth in yield per cow is forecast to grow at 1.4% annually, reaching 8,300 per cow by 2030 and organic output is predicted to reach 10% by 2030, a threefold increase on 2018 levels of organic. Cow numbers are forecast to be down 7.5% to 19.2m head.

Increasing production in developing countries is expected to lead to a reduction in the amount of dairy imports to 1.3m tonnes annually by 2030 though the value of EU exports is expected to grow by on average 3% annually with half this growth coming from cheese and one-third coming from skimmed milk powder.

Cheese production and exports are expected to grow in the next decade as EU milk output increases with consumption, as well as exports, predicted to grow. EU butter consumption is also expected to grow at 0.3% annually and exports are forecast to grow at 3% annually.

Beef

The outlook for EU beef production in the decade from 2020 to 2030 is for 600,000t, a 8.3% decline with a drop in cow numbers of 2.2m leaving the suckler herd at 9.9m cows. Lack of profitability is given as the key driver of this trend. Consumption of beef is also predicted to decline from the current EU average of 10.6kg to 9.7kg per person annually.

Even though global demand for beef is increasing, the EU share of global exports is forecast to fall from 7% to 6% with live exports of cattle in particular expected to fall because of “concerns over animal welfare during transport.” With the decline in production over the course of this decade, the EU Outlook predicts a “rebound in beef prices between 2025 and 2030” though they don’t estimate by how much.

Sheep

EU production of sheepmeat is forecast to remain stable for the next decade at around 630,000t and, likewise, with consumption at 1.3kg per person. As with cattle, live exports are expected to fall by one-third to 40,000t due to welfare concerns. Exports of sheepmeat will continue to be curtailed by the competitiveness of Australia and New Zealand, the dominant global players. New Zealand has a 228,000t quota between the UK and EU and even with Australia increasing its quota in a trade deal, EU imports are forecast to remain stable and stay below what is allowed by tariff rate quotas (TRQs).

EU sheepmeat prices are believed to have peaked in 2020 with a decline predicted out to 2025 followed by recovery in the second half of the decade. As with beef, no prediction has been made on the value of price movements.

Pigmeat

Like other categories, environmental concerns are one of the reasons behind a predicted decline of EU pigmeat production by 1m tonnes, 4.6% over the coming decade.

Values are believed to have peaked in 2019 and demand in Asia is expected to fall as it recovers from the effects of African swine fever (ASF), though production in Asia may not have fully recovered by 2030, when EU pigmeat prices are forecast to be €1,600/t.

Comment

The recurring theme of the sector-by-sector analysis of the EU outlook is how sustainability, environmental and welfare concerns are expected to constrain production growth. Dairy is evidently the sector where the EU is particularly competitive and trade deals with Japan, Canada and Vietnam have smoothed the path for exports to Asia. Sheepmeat supply will remain in deficit in the EU though the position of EU–UK quota with New Zealand remains to be resolved. Pigmeat output may decline but the EU will still be a key global player whereas beef will remain challenged given the production and currency advantages enjoyed by South American countries.

EU agriculture policy in the Farm to Fork strategy is designed to forgo output from agriculture. Yet, demand for agricultural produce will continue to grow – it will just be supplied from elsewhere in the world.