Poultry is the only meat that will see a strong increase in EU production and consumption while demand for traditional dairy products such as cheese should continue to grow. These are just a few of the projections from the European Union agricultural outlook for 2018-2030 report (9.1 MB - PDF) published on 6 December 2018 by the European Commission.
Projections for the European agricultural markets for 2018 to 2030 are presented for a wide range of agri-food products, including meat, arable crops, milk and dairy products, and fruit and vegetables. The evolution of agricultural income and the environmental aspects of EU agriculture are also covered. In addition, this year a focus on each market’s organic sector is included under the section ‘What about organics?’.
Many drivers will influence the agricultural markets over the next decade in the EU and beyond. The report takes into account the impact of consumers’ behaviours on those markets. For instance, the consumer and citizen will become more conscious of their food, its sourcing, and its impact on the environment and climate change. For producers this will result in higher production costs but will also be an opportunity to differentiate their products, adding value while reducing negative climatic and environmental impact. This will be reflected in alternative production systems, such as local, organic or other certified products being increasingly in demand.
The report projects a decline of total agricultural land in the EU, though at a slower pace than in the past decade, from 178 million ha in 2018 to 176 million ha in 2030. In line with this trend, main cereals, permanent grassland and permanent crops are set to further decline in the period to 2030. In contrast, land used for fodder will increase slightly, reaching 22 million ha in 2030.
Projections for arable crops
For the sugar sector, health initiatives and consumer preferences will lead to a decline in EU consumption by 5%. By 2030, the EU sugar production is expected to reach 19.3 million t, in comparison with 18.6 million t in 2018.
Concerning the cereal market, production is expected to continue growing, and reach 325 million t by 2030 (compared to 284 million t for 2018). This growth will be driven by an increase in industrial use of cereals, a small rise in feed demand and export prospects.
As for oilseeds, no further growth is expected in the rapeseed crop area due to the opportunities and limits of biofuel policy after 2020. In addition, demand for protein crops will continue to be strong for feed as well as for human consumption. The supportive policy environment will facilitate that, and further drive production growth. However, protein crops only represent 1.4% of total crop area, limiting its overall growth.
Projections for milk and dairy products
Over the outlook period, population and income growth will drive higher consumption of dairy products and global import demand. By 2030, the EU could supply close to 35% of the global demand, with a focus on value-added products (organic, geographical indications, etc.).
EU exports of dairy products are expected to grow on average by around 330,000 t of milk equivalent per year. As for the EU market, close to 900,000 t of additional milk per year would be needed to satisfy its growth for traditional dairy products, which is mainly cheese. The EU milk production should experience a modest increase over 2018-2030, at 0.8% per year on average.
By 2030, the EU meat market will be influenced by changes in consumer preferences, export potential, profitability, and for beef, changes in the dairy sector. Overall EU meat consumption will decline, going from 69.3kg per capita in 2018 to 68.6 kg in 2030.
EU beef production is estimated at 8.2 million t in 2018. However, production is expected to then decrease, influenced by a smaller herd, low profitability and declining demand. As for sheep and goat meat, thanks to improved returns for producers, maintenance of coupled support and sustained domestic demand, production will increase during 2018-2030, reaching 950,000 t in 2030, compared to 903,000 t in 2018.
EU consumption of pork will decrease from 32.5 kg per capita in 2018 to 31.7 kg in 2030. This decline will be compensated by higher exports, with world import demand that will continue to grow at a rate of 0.7% per year during 2018-2030. Poultry is the only meat that will see a strong increase in EU production and consumption. By 2030, EU production should reach 15.5 million t, compared with 14.2 million t in 2018. Global demand will also be growing, supporting an increase in EU exports.
Projections for specialised crops: wine, olive oil, fruit and vegetables
The EU olive oil sector is expected to grow over the outlook period. In 2018/19, it is expected to reach 2.3 million t and will increase by 1.3% per year over that period. Global demand for EU olive oil will also be growing, leading to a further expansion of EU exports, up 3.3% per year during 2018 – 2030.
As for the wine sector, total EU production and use are expected to stabilise. Over the outlook period, some slight reduction in human consumption is anticipated from 26 litres per capita on average in 2018/2019 to 25.3 litres in 2030. As for exports, the EU should maintain steady export growth, driven mainly by geographical indications and sparkling wines.
For the fruit and vegetables sector, apple production should stabilise, from 12.7 million t in 2018/2019 to 12.4 million t in 2030, over the outlook period due to a reduction in production area combined with increasing yields in the EU. Peaches and nectarines will also face a reduction in production area in the EU, leading to a slight decline in production (from 4.1 million t in 2018 to 4 million t in 2030). Finally, fresh tomato production is expected to remain stable despite increasing yields driven by longer seasons (from 7 million t in 2018 to 6.8 million t in 2030).
Projections for agricultural income
The report, based on the evolution of the markets, gives an overview of how farmers’ income will evolve over the outlook period. The analysis shows a stabilisation of agricultural income per farm (or annual working unit) throughout the outlook period. This can be explained by a significant increase in agricultural output (+17% over the period) with, in parallel, a similar increase in production costs, mainly due to higher energy prices and stronger depreciation. In addition a decrease in labour due to structural changes is also playing a significant role.
Projections for environmental aspects
Results from the market outlook have also been taken into account to analyse their impact on certain climate and environmental indicators. For instance, changes in the livestock sector will be a major factor for emissions. Therefore, the projected decrease in EU livestock numbers by 2030 will contribute to a decrease in emissions. However higher crop production and manure application will lead to an increase. This will result in greenhouse gas emissions staying at the same level than in 2012, while ammonia emissions will decrease by 9%.
As for nitrogen, projected nitrogen losses to water in the EU will be 8% lower than in 2012. In relation to plant biodiversity, results in potential plant species in the EU between 2012 and 2018 do not change much, with an increase of 2% of potential plant species.
The EU outlook report for 2018-30 contains all relevant market data, accompanied by an explanation of assumptions, a description of the macroeconomic environment, and the general consequence of uncertainties. The predictions and perspectives highlighted in the report will be discussed at the annual EU agricultural conference, taking place in Brussels on 6-7 December 2018.