The European Commission has released its latest EU agricultural outlook report, which presents the market projections for EU agriculture until 2035. According to the report, the EU agricultural sector is expected to continue to be a net exporter of agri-food products and contribute to global food security, while adapting to challenges such as climate change and changing consumer demand.
The macroeconomic environment is assumed to be stable, with real GDP growth in the EU projected to stabilize in the medium term and inflation to return to the 2% target level. On this basis, market projections for EU agriculture are developed with agro-economic modeling methods.
The report projects a change in EU consumption patterns: meat consumption is expected to marginally decline, mainly for beef and pig meat, while plant protein consumption is expected to grow. Dairy product consumption is expected to remain stable, with changing habits and expanding novel uses.
The market projections are built on the 2024-33 OECD-FAO Agricultural Outlook, which projects a slight fall in real-world prices for the main agricultural commodities, and a growing demand from low- and middle-income countries.
Arable crops
The use of EU arable land is expected to partially change towards 2035. Land-use shifts from cereals and rapeseed to soybeans, other oilseeds, and pulses are projected, driven by lower demand for cereals for feed and biofuel. The area of agricultural land under permanent crops is expected to increase, while permanent grassland and fallow land could remain stable.
Yields of cereals and oilseeds are projected to marginally increase by 2035, thanks to positive developments in precision farming, digitalization, and improved soil health, compensating for climate change, reduced availability, and affordability of agricultural inputs. Cereal production is expected to be driven by corn and barley, while wheat production is expected to pick up after a decline in 2024.
Milk and dairy products
The EU dairy sector will reach a turning point, where the decline in the dairy cow herd will no longer be counterbalanced by growth in milk yields in the medium term. EU milk production is expected to decline. However, the sector will increasingly contribute to the environmental sustainability of food systems, while generating more added value in the sector.
The EU production of cheese and whey products would continue to grow, albeit at a slower pace than in the past. EU consumption of dairy products is expected to remain stable, with changes in its composition. For example, lifestyle changes and growing health requirements may increase demand for fortified and functional dairy products.
Meat products
Total EU meat production is expected to decline. Beef production is projected to decrease driven by sustainability concerns, low profitability, and a stricter regulatory framework. Similarly, beef consumption is expected to decline driven by tight supply and high prices.
Pig meat consumption is projected to decrease due to sustainability concerns, while poultry consumption is expected to increase, driven by a healthier image and relatively cheaper price. Sheep and goat meat consumption is expected to remain stable, due to sustained consumption patterns related to cultural traditions.
Simulation on stress-testing the EU feed supply chain
A modeling exercise assesses how improvements in crop yields and feed efficiency in the EU can mitigate the effects of a yield shock in the global feed market. It models the impact of a hypothetical extreme weather event, affecting global feed suppliers in 2035, on EU feed supply chains and consequently on the EU meat sector, as the EU is a net importer of protein feed. The simulation shows that EU meat production and consumption would be only marginally affected, while improvements to EU feed efficiency and protein-rich crop yields could mitigate the negative impacts on the EU meat sector to a limited extent.
Download the report here.
