Brussels, 06/01/2014 (Agence Europe) - For the next ten years, the European Commission predicts moderate growth in the agricultural sector, mainly limited by environmental constraints in animal production. On the internal cereals market, biofuel is the most dynamic demand factor and yield is progressing only slightly. Animal production (milk, pig meat and poultry meat in particular) is developing due to growing global demand.
End December 2013, the European Commission published its medium-term prospects (2013-2020) for the European agricultural sector which, like the rest of the economy, is predicted to make a moderate recovery from 2014.
The medium-term prospects for the EU cereals market are “relatively positive” thanks to solid world demand and firm prices. The medium-term prospects for the EU cereals market are characterised by relatively tight market conditions, low stocks and prices which are above long-term averages. The EU remains a net exporter of cereals.
The biofuels market will remain the main demand factor in the arable crop sector for the next ten years within the EU. In the context of the European directive on renewable energies which provides for a 10% share of renewable energy in transport by 2020, biofuels are expected to contribute to 8.5% of liquid transport fuels. From 2020 on, production is expected to stabilise at 18.6 million tonnes (compared with 11.3 million tonnes in 2013), or perhaps fall slightly.
Cereals production is expected to mainly depend on yield as agricultural surface areas will be reduced slightly. Thus, the 2023 harvest could be 316 million tonnes mainly due to the low annual yield growth rates (0.6% on average). Yield for maize, rapeseed and sunflower are expected to progress by around 1% annually, while the yield for wheat is expected to evolve very little (+0.3% per year). Some reallocation between crops in the context of a stable overall cereal area is expected, with maize and common wheat further increasing their share (up to 18% and 41% respectively) at the expense of other cereals.
Pork and poultry meat market expected to expand, with decline in beef.
The EU meat sector is expected to be supported by strong demand on the world market. In Europe, prospects for economic growth recovery could bring a rise in consumption. Poultry meat will remain the most dynamic part of the market and pork will continue to be the meat most consumed (31.8 kg per inhabitant per year). The consumption of beef and sheep meat is projected to drop both in absolute and in relative terms. As far as production is concerned, poultry meat will have the fastest rate of increase with an annual growth rate of 0.8% between 2012 and 2023, to reach 13.6 million tonnes. Exports, especially to China and to Saudi Arabia, are forecast to grow by 15% in the next decade.
Regarding pig meat, following two years of decline due to the implementation of new animal welfare rules (-2% and -1.2% in 2011 and 2012 respectively), production is expected to increase as of 2014 to reach 23.4 million tonnes in 2023. That increase (+2.8% over the given period) is moderate due to environmental constraints in some of the main producer countries (for example, in the Netherlands and in France). Exports, mainly to Russia and China, should surge by 12.4% in 2023 compared to 2010-2012.
Finally, the production of beef is expected to decline by around 7% by 2023 to 7.6 million tonnes, mainly due to the developments in the dairy herd (which makes up around two thirds of meat production). Imports from South America should increase to 400,000 tonnes annually without, however, exceeding the record import levels notched up in 2005-2007.
Limited expansion of milk production. In the milk and dairy product sector, despite the end of the quota system in 2015, the growth of EU production should remain limited due, in particular, to environmental constraints that will play an increasing role in certain member states. Deliveries could reach 150 million tonnes in 2023 (i.e. less than 10 million tonnes more than in 2012). This rise in production will be brought about by an increase in yield rather than an increase in the number of cattle. Cheese production is expected to absorb most of the additional milk delivered to dairies. In 2023, production will reach 10.7 million tonnes with exports of nearly one million tonnes.
Finally, real agricultural income per labour unit is projected to increase by 1.8% per year from 2013 to 2023, as a result of the continuous decrease in the workforce employed in agriculture. In the older member states, real agricultural income per working unit is expected to be 17.5% higher by 2023, compared to 2012, while, in the new member state, it could more than double. The gap between the absolute levels of agricultural income per worker between the older and newer EU member states will narrow but will still remain substantial. (LC/transl.jl)