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Agriculture and rural development

Short-term outlook

Based on the latest data and the reflections of market experts within the European Commission, the short-term outlook is published three times per year (in early spring, early summer and early autumn).

Summer 2022 edition

Image: Short-term outlook for EU agricultural markets

The fallout from Russia's military aggression against Ukraine continues to impact global commodity markets and pose a major threat to food security. Global agricultural prices have risen by 30% since the invasion began, although some relaxation has been observed in recent weeks. Weather conditions in the EU are creating further challenges for the new harvest, with a fall in earlier forecasts now foreseen.

Additionally, outbreaks of animal diseases and high feed prices are also having a negative impact on EU animal production. These issues form the basis for the summer 2022 edition of the short-term outlook report. Market outlooks are provided for the EU-27. In addition to the short-term outlook, the Commission also publishes associated documents, including statistical annexes and balance sheets.

Highlights: EU agricultural markets short-term outlook – summer 2022
(1018.04 KB - PDF)
Report: EU agricultural markets short-term outlook – summer 2022
(2.8 MB - PDF)

Macroeconomic outlook

Russia's invasion of Ukraine is also having macroeconomic impacts and is exacerbating pre-existing challenges for the EU's economic growth. The European Central Bank (ECB) states that if the invasion continues into 2023, the recovery of the euro area's GDP to 2019 levels is not expected before 2024. Inflation in the EU is also expected to remain at a historic high, rising to 6.8% in 2022 according to the Commission's forecast.

Fossil fuel markets are expected to remain tight and prices will stay high. EU natural gas prices are likely to increase further if Russia continues to deliver reduced volumes. These sustained adverse risks have seen the ECB revise the euro area's real GDP growth forecast for 2022 down to 2.8% in their baseline scenario and -1.7% in their pessimistic scenario.

Short-term outlook: macroeconomic outlook
(358.49 KB - PDF)

Arable crops

The total availability of EU cereals in 2022/23 is expected to be almost identical to the previous season (357.4 million t v  at 358.1 million t). This is a result of high levels of stocks and will compensate for lower production, which is forecast to reach 286.4 million t (-2.5% year on year).

This drop in production is due to the hot and dry spring in key EU cereal production areas, and this could fall further if current adverse weather conditions (notably drought) continue. The level of availability, combined with lower imports, will allow net exports of cereals to increase to 33.5 million t.

EU oilseed areas for the 2022/23 harvest have increased substantially (+7.5% year on year) due to high prices and the temporary derogation allowing crops to be sown on fallow land. Sunflower plantings in particular increased due to their low water and fertilisation requirements. Total EU oilseed production is forecast at 32.1 million t (+7.8% on the 5-year average), including a record 11.1 million t of sunflower seeds, which will help to compensate for the loss of supplies from Ukraine.

The 2022/23 EU sugar marketing season is expected to start with beginning stocks of 1.9 million t (+58% compared to last season). Production is forecast at 15.8 million t, in line with the 5-year average, while consumption is expected to remain stable.

Short-term outlook: arable crops
(813.05 KB - PDF)

Specialised crops

A 2021/22 EU olive oil production increase of 11% was supported by a higher oil content in olives. Above average producer prices for olive oil are likely to remain due to sustained high input and transport costs, and high prices for other oils and fats. EU exports are forecast to decline compared to the record levels seen last year, while some recovery in consumption is expected. Ending stocks could be lower than expected, leading to below average production for 2022/23.

Despite the decrease in wine production and imports in 2021/22, consumption is expected to increase by 5% to 23 l per capita. This is a result of lower exports and reduced use of vinified production for other uses (distillation, vinegar, brandies). When purchasing, consumers are increasingly paying attention to the origin of wine, followed by taste and brand.

2022 EU per capita consumption of fresh peaches and nectarines is due to increase to 6.1 kg despite lower purchasing power. This could be a result of higher production, good weather and the return of tourism. While this marks an increase, it is still below the long-term average.

After a very good season in 2021 with high production, strong consumption, great quality and low stocks, EU tomato production for 2022 is expected to decrease by 9% to 16.5 million t. Production for processing is forecast to fall by 14%, with production for fresh consumption due to fall by 3% year on year. Lower production is a result of drought, lower expected demand, switching to more profitable crops, and lower planting in greenhouses due to high energy costs.

Short-term outlook: specialised crops
(507.79 KB - PDF)

Milk and dairy products

EU dairy prices are at record levels. While skimmed milk powder and whole milk powder prices remain relatively stable and whey prices are showing some decline, others continue to rise. This has seen EU raw milk prices reach record highs. Despite this, farmers' margins remain tight due to higher input costs. Dry and warm weather conditions in spring affected grass quality and the availability of other feed ratio components, which could see milk yield development being lower than expected in 2022.

This, along with a smaller dairy herd (-1%), combine to result in an expected decline of 0.6% in EU milk deliveries in 2022. The lower grass quality and lower feed use are also likely to decrease the milk fat and protein content, thus reducing the availability of milk solids for further processing.

In 2021, the EU milk sector experienced unprecedented developments. The seasonal trend historically observed in the EU raw milk price did not materialise and prices grew throughout the year. Despite the price increase, EU milk deliveries dropped by 0.4%, for the first time since 2009. The rising costs slowed down the milk yield growth (1.2%) and led to a stronger than expected dairy herd reduction (-1.5%).

EU cheese and cream production could continue to grow and reduce milk fat availability for butter and whole milk powder production. An increase in cheese exports is expected, while domestic use of dairy products could grow slightly in 2022 (+0.3%), assuming sustained retail sales and foodservice recovery, as well as limited transmission of higher producer prices along the chain to consumers.

Short-term outlook: milk and dairy products
(633.54 KB - PDF)

Meat products

EU beef production is expected to decrease by 0.5% in 2022, despite high prices, mainly due to a structural adjustment in the beef and dairy sector. Exports should increase to existing high-value markets but are constrained by record-high domestic prices. Imports are on the rise due to Brazilian supply.

Increasing concerns for the environment, reduced export prospects, sustained high input costs and African Swine Fever (ASF) are due to override the high pigmeat price incentive and result in decreased production. The EU supplied China for two years of the acute ASF crisis, but the UK is now once again the EU's primary export destination.

EU poultry production is due to stabilise in 2022. The EU broiler price is high enough to compensate for high input costs and the continued spread of highly pathogenic avian influenza, among other factors. Trade with the UK has returned to pre-withdrawal levels but the EU is losing some export markets. Imports are expected to partially recover to 2016-19 levels, although disruption to trade flows with Ukraine is cause for some uncertainty.

Despite the historical low EU sheep and goat flock, slaughterings are expected to stabilise in 2022. Trade should resume but still at relatively low levels, leading to sustained high domestic prices.

Short-term outlook: meat products
(349.62 KB - PDF)


Short-term outlook report – EU-27 statistical annex
(580.17 KB - PDF)
EU balance sheets, production and yield by EU country (EU-27)
(1.39 MB - XLSX)