In the coming years, EU farmers’ resilience will continue to be tested by changing climate and market conditions and evolving societal demands. The multiplication of extreme climatic events will continue impacting agricultural productivity growth. At the same time, consumption of beef, pigmeat, sugar and wine is due to decrease. The agricultural sector is therefore undergoing adjustments to adapt to climate change and consumer preferences. Energy and other input costs are also assumed to remain higher than pre-2021 levels in the medium term. The Common Agricultural Policy remains crucial to support farmers in transitioning to more sustainable agricultural production systems, while becoming more resilient and competitive. The EU will continue to be a net exporter and will keep contributing to global food security. These are some of the conclusions of the medium-term outlook report presented today by the European Commission at the EU agricultural outlook conference.
In his opening speech delivered at the agricultural outlook conference, Commissioner Wojciechowski said:
Climate change, biodiversity loss and resource scarcity are some of the biggest threats we are facing in the next decades, including for food security. We need a system that provides security in the availability and affordability of food for citizens, as well as stability in the livelihoods of farmers and the economies of rural areas. We need a system that ensures sustainability, protecting climate, biodiversity and natural resources. And we need a food system that enables solidarity with the international community, to maintain the global supply of food through trade and co-operation. The current CAP is putting tremendous efforts in the green and digital transition. With this support and €307 billion in funding from 2023 to 2027, EU farmers will keep delivering quality, safe and nutritious food to all of us.
The medium-term outlook report covers the period until 2035 and looks at production, consumption and trade in the arable crop, dairy, meat, olive oil and wine sectors, in addition to agricultural income. It has been developed considering the main drivers expected to affect the future of EU agriculture, such as climate change, consumer demand, the evolving farming sector structure, under the most plausible future macroeconomic environment, and assuming the current policy framework remains as it is until 2035. It takes into account agricultural and trade policies in place in September 2023.
Today’s report also includes a chapter on apples, peaches, nectarines and tomatoes, analysed in detail in selected Member States. In addition, two scenario analyses assess first, the impact of climate change on world agricultural yields, trade and commodity prices and second, the environmental and economic impacts of a wider adoption of soil management practices promoting carbon sequestration and reducing soil greenhouse gas emissions.
Arable crops
Fallow land, benefitting biodiversity, is expected to increase to 7 million hectares by 2035 while yields of cereals will remain stable thanks to, among other things positive impacts of precision farming, crop rotation and improved soil health which could counterbalance negative impacts of climate change. By 2035, land shifts from cereals to soya beans and pulses are also expected. This change will be driven notably by a lower demand of cereals for feed because of a reduction in the EU’s production of pigmeat and beef and an increase of more grass-based and extensive production systems. Policy incentives to support an increase of plant proteins will also support this change.
The reduced demand for biofuels could result in a decline of vegetable oils, leading to less imports. As regards sugar, EU sugar consumption will continue its decreasing trend, largely because of consumers shifting to diets with lower sugar intake. This, coupled with reduced yield and cultivating areas will result in a slightly lower production.
Milk and dairy products
The EU milk productivity should continue to increase but at a slower pace, with high quality and sustainability standards generating more added value in the sector. The EU will remain one of the top two exporters of dairy products globally.
Due to an expected decrease of the dairy herd, the EU milk production could slightly decline. However, production of cheese, whey and skimmed milk powder could still grow while that for butter remains stable. In general, lifestyle choices and the health requirements of an ageing population will likely further increase demand for fortified (with vitamins and minerals added) and functional products addressing specific nutritional needs.
Meat products
EU beef consumption remains challenged by high price, consumer health and sustainability concerns. This, combined with low profitability is expected to lead to further production decline by 2035. The total EU cow herd is set to decrease by 3.2 million head (10%). The pigmeat sector is facing a similar situation. EU pigmeat production is projected to fall by 0.9 % per year until 2035, corresponding to almost 2 million tonnes compared to 2021-2023. Consumption of sheep and goat meat will remain relatively stable, but the EU production and herd will decline, leading to more imports.
Among meats, poultry could continue benefitting from a cheaper consumer price, relatively healthier image, and an absence of religious constraints. Together with further export opportunities, this would push poultry production upward by 2035.
Specialised crops
Climate change will also impact the production and quality of olive oil, wine, apples, peaches, nectarines and tomatoes. For olive oil, the introduction of more resistant varieties and more intensive production systems, together with research and innovation, could reduce the negative impacts. With relatively stable EU consumption overall, exports could grow further.
EU wine consumption will continue its decreasing trend and will decline further by above 1% per year to around 20 litre per capita by 2035, 2.4 litre less than the average consumption in 2018-2022. This is expected to negatively impact the production. EU exports of wine could continue to grow but at a slower pace.
Consumption of apples could increase as consumers turn to fresh, easy-to-consume fruit. Poland and Italy are projected to remain key EU apple exporters and could even increase their net exports. The consumption of peaches and nectarine, on the other hand, could decline due to higher prices and preferences for other fruit. This could push the production slightly down. In the same vein of “easy-to-consume” fresh fruit and vegetables, the fresh consumption of smaller-sized varieties tomatoes could increase. Over the period 2022-2035, the EU is expected to maintain its current net importing position in tomatoes for fresh consumption.
Scenario on the impact of climate change
This scenario analyses how past changes in temperature and rainfall affect global animal and crop yields and how near-future high-emission climate change disrupts agricultural production and trade. Despite a global increase in harvested area for maize, rice, soya bean, and wheat, the yield of these commodities will still decline. The world production of pigmeat and poultry could also decrease driven by a reduced availability of feed grains. Considering the expected growing food demand, it is key to implement climate change mitigation and adaptation strategies to counterbalance these potentially negative impacts.
Scenario on the wider adoption of sustainable soil management practices
This scenario looks at the environmental and economic impacts of tillage practices, winter cover crops, and peatland restoration through rewetting. It confirms that peatland restoration can effectively contribute to decreasing greenhouse gas emissions, nitrogen surplus and ammonia emissions, while soil management practices can help reducing nutrients leaching to water, soil erosion, as well as greenhouse gas and ammonia emissions. The simulations showed moderate negative effects on farm income that are mainly due to higher costs.
Background
The European Commission publishes every year its medium-term outlook for the next twelve years, presented at the EU Agricultural Outlook conference held every December. The analyses of agricultural markets rely on data available up to end-September 2023 for agricultural production and trade and the scenarios are based on a set of macroeconomic assumptions deemed most plausible at the time of the analysis. The projections take into account the 28 CAP Strategic Plans as well as policy actions and free trade agreements in place or ratified up to the end of September 2023. Due to the inevitable uncertainties regarding macroeconomic developments and geopolitical and trade relations, this report represents more a baseline for future analytical work by the European Commission rather than a forecast as such. This Commission report is a joint effort between Directorate-General for Agriculture and Rural Development (DG AGRI) and the Joint Research Centre (JRC), with DG AGRI responsible for the content.
Details
- Publication date
- 7 December 2023
- Author
- Directorate-General for Agriculture and Rural Development
- Location
- Brussels