On 11.1.21 the European Commission’s DG Agriculture and Rural Development (AGRI) published the report ‘EU agricultural outlook for markets, income and environment, 2020-2030‘. (1) A complex scenario report on possible trends in agricultural markets in EU-27 in the decade 2021-2030.
Agriculture in EU-27, scenario report. Data and perimeter
The report was produced by DG AGRI together with the Joint Research Center (JRC), also taking into account European sector policies and prospective studies by FAO and OECD. The Wageningen University Economic Research Center (NL) and the Thünen Institute (D) contributed to the analysis of national markets for apples and tomatoes.
The projections are for The European Union with 27 member states, as a result of Brexit, not including the 5 candidates (Albania, Montenegro, Serbia, North Macedonia and Turkey). International agreements already ratified (with Japan, Canada, Vietnam, Ukraine) are considered, not also those awaiting ratification (Mercosur, Mexico).
European agriculture, challenges and opportunities
The first challenge for European agriculture is rescuing it from the economic crisis triggered by Covid-19, the most severe in peacetime since the Great Depression of 1929. Olivier De Schutter – Special Rapporteur on extreme poverty and human rights, formerly Special Rapporteur on the right to food, at the UN – has already highlighted the inadequacy of social protection measures so far in 208 countries. (2) Therefore, safeguarding incomes in agriculture is primarily related to:
– Effective implementation of EU Directive 2019/633 (UTPs, Unfair Trade Practices), (3)
– transparency in the value chain, (4)
– Protection of small-scale agroecology as recommended by the UN.
The opportunities are first and foremost related to the ecological transition that was promised in the EU Strategies
Farm to Fork
e
Biodiversity
(as well as in the Green Deal), but deprived of resources in the 2021-2027 CAP(non-)reform. Other opportunities can be seen in digitization and especially in the
blockchain
, also understood as a means of fostering transparency on the value chain and thus giving evidence of the social sustainability of supply chains, as consumers themselves are also demanding in Italy. (5)
Arable land left to pasture, conversion to organic less than promised
DG AGRI predicts a reduction in the current decade of the Utilized Agricultural Area (UAA) in the EU. In particular, a reduction in the area under cereal (wheat, barley) and oilseed (sunflower, soybean, canola) crops. Improved crop rotation and soil treatment systems, as well as more technical support in decision-making, should, moreover, keep total cereal production in the EU stable (277 mln tons). Consumption is also stable, forecast at 260 mln tons.
The UAA freed from arable land for food production is likely to be used for pasture and forage, corn and vegetable protein to meet the growing demand for feed materials. Failure to provide appropriate incentives for the conversion of conventional crops to organic in the 2021-2027 CAP will allow organic to barely reach 10 percent of the European UAA by the end of the decade. In defiance of the commitments made by the Von Der Leyen Commission in the Farm to Fork Strategy (under which organic was to cover at least 25 percent of the total UAA by 2030).
Plant protein, growth continues
EU plant protein production is expected to continue the growth already attested in the previous decade, in terms of cultivated area and yields. Legumes are growing, thanks to incentives to include peas, beans, broad beans, chickpeas, and lentils in the crop rotation, even in Italy. But also and especially to the rediscovery of their nutritional merits by consumers.
Per capita consumption could increase by as much as 50 percent (6.7 kg/year) between now and 2030 in the form of dry product and ready-to-eat foods in the Veg and flexitarian areas. Between 2020 and 2030, legume crops could increase by as much as 37 percent, also benefiting further from the results of research and technological innovations that seek to improve their genetic quality to increase their yield and thus make them more profitable.
Oilseeds, soybean and sunflower on the rise
Canola continues to lose ground, albeit at a lower rate than the previous decade (-4%, after -7% over the 10 years). Areas devoted to sunflower will increase slightly (+1% from 2020 to 2030), those devoted to soybeans more sharply (+13.5% over the said period). Due to its increasing use in crop rotation as an alternative to canola and/or sugar beet. Above all, as an alternative to GMO soybeans from the American continent. As well as a source of vegan protein.
Total oilseed production in the EU is expected to reach 30.2 million t in 2030. Due to positive yield trends, particularly for soybeans, production is expected to increase from low levels in 2018-2020. Production of rapeseed, sunflower and soybean could reach 16 million t (-2.2 percent from 2020), 10.6 million t (+6.6 percent) and 3.5 million t (+26.9 percent) in 2030, respectively.
Sugar, at the turning point
The dastardly decision to close Italy’s large sugar mills-in the early 2000s, with European ‘contributions’-gave France and Germany a solid and profitable market, for farmers above all. The European Union continues to be a net importer, although the international sugar price is now in line with the European price (40euro/ton). Beet growing has thus resumed in the old continent, with the prospect among other things of higher yields per hectare (from 72 t/ha in 2018-19 to 75 t/ha in 2030).
Production levels will reach 16.2 million tons by 2030, to the point of achieving self-sufficiency and starting exports. Thanks in part to the gradual decrease in domestic consumption, which can be attributed to two positive factors (reduction in individual consumption, which accounts for 85 percent of the total, and its reduction in food and beverages) and one negative factor (the substitution of sucrose with its poor alternatives, such as syrup and fructose from corn).
Milk and dairy products
Milk is increasing production, in quantity, at a slower pace than in the previous decade (+0.6 percent, instead of +1.2 percent/year. Until it reaches 162 million tons, in 2030). But especially in variety, thanks to European consumers’ increasing focus on nature- and animal welfare-friendly production (e.g., organic, free-range, GMO-free hay-based feed). The gradual decline in fresh milk consumption and the stability of yogurt are thus accompanied by the enhancement of authentic quality products and the growing demand for alternative products, such as skyr (in addition to cream).
European cheeses will reap further success both in the European Union, where per capita consumption is steadily increasing (21.8 kg expected in 2030, 1 kg more than in 2020), and in the global market. The EU will continue to maintain presidium on value-added dairy products (28 percent by value, 49 percent on cheese alone, as of 2030), along with the U.S. and New Zealand. Butter will remain stable (+0.3%/year in the EU) in the face of its widespread substitution by vegetable fats in the secondary processing industry (e.g., bakery, pastry). On fresh dairy products, however, the EU will remain a net exporter (7 percent to 2030).
Dairy, innovation
Innovation in the dairy sector will be crucial. In animal husbandry, to bring value to the raw material and improve sustainability (FAO, 2019). In processing, to reduce milk loss by diverting excess raw material to the cheese supply chain.
By 2030 it is estimated that it will be possible to harness the potential of whey in foods with specific purposes (e.g., clinical, sports, children’s). To the point of reserving a significant share of it (up to 62 percent, up 11 percent from 2020) for food fate, instead of its traditional use as feed material.
Meats and meat products
Meat consumption will continue to grow globally, at an estimated rate of +1.1 percent/year, with the favor of population growth. European production can in turn grow (+1%), provided it panders to new consumer demands. Local origin, organic certifications, sustainable practices that respect animal welfare and the ecosystem.
Non-EU meat imports (cattle and poultry), without considering the impact of theEU-Mercosur agreement, may reach 4 million tons/year.
Poultry is the only area set to grow, in Europe (+620 thousand t, +4.6% to 2030), as well as globally. Pork production in the EU is expected to drop by 1 mln tons (-4.6 percent, between 2020 and 2030), although Europe will still maintain export leadership (38 percent to 2030). Beef production in the EU in turn will continue the downward curve that began in 2019 (-8.3 percent in 2030), in line with the decline in per capita consumption (from 10.6 to 9.7 kg, between 2020 and 2030). Fewer but better and slightly more expensive meats from 2025, thanks in part to a drop in supply.
Olive oil, sustainable and health friendly
European olive oil will grow again, over the next decade. Awareness of the health benefits associated with its consumption will revive domestic demand (+0.2 percent/year), especially in non-producing countries (26 percent of the EU total, compared with 20 percent in 2019). Production growth (+1.3%, to 2030) will also be supported by increased yields of intensive and superintensive crops on the Iberian Peninsula (+0.5%).
In Italy, annual olive oil production fell by 4 percent or more between 2009 and 2019, bucking the trend of Spain (+2 percent) and Portugal (+9 percent). In the current decade, Italian production may resume slight growth, thanks to more resilient replanting, but it will not be able to keep up with Iberian competition from a quantity standpoint. Except stand out for sustainability and organoleptic peculiarities. EU net exports, after the Covid-19 shock, will increase by 5 percent/year to over 1 mln t in 2030. China, Russia and Southeast Asia are the markets to look to.
Wine, bubbles and lightness
The challenge of the wine sector has to do with the changing lifestyles and preferences of young people. Wines that are lighter in alcohol content and sparkling, less ‘busy’ and ‘for all occasions’ could help slow the decline in per capita wine consumption, which is estimated to reach about 25 l/year (-0.3% the expected average for the current decade, -1.1% that of the past decade).
Exports-which have so far offset the decline in domestic demand, with a good growth rate (+5%/year in the period 2009-2019)-are set to stabilize (+0.3% per year, up to 31 mln hl in 2030). Production will decrease slightly (-0.3%/year, toward 160 mln hl), despite the slight increase in cultivated area (+0.2%/year). With a view to organic production and high-quality, higher-value, lower-yield-per-hectare wines.
Apples
European apples remain stable in production, 11.8 mln tons to 2030. Consumption is increasing (15.7 kg, +1 kg compared to 2019), thanks to the growing focus on health that applies especially to organic fruit, in fact growing. Fresh apple exports, led by Poland and Italy, will decline to stabilize at about 1.2 mln tons (-19%, 2030 over 2019). In fact, Russia, the leading importer, is about to achieve self-sufficiency.
In contrast, per capita consumption of processed apples decreases (7kg to 2030, -9%). Reduced consumption of industrial juices (which account for 65 percent of processed apples) will be partly offset by growth in compotes and cider. The EU remains a net importer of concentrated juices.
Peaches and nectarines
Peaches and nectarines will remain stable in production, projected at about 3.6 million t to 2030. Spain, Italy, Greece and France will continue to express about 95 percent of EU production. Per capita consumption in the EU will fall to 6.2 kg (down 9 percent between 2019, when availability was high and prices low, and 2030). The decline in consumption is driven by lower availability and competition from other summer or tropical fruits, which are also increasingly available in RTE(Ready-To-Eat, fifth range) packages.
Imports and exports tend to be stable, with the exception of exports of canned peaches, which are expected to increase significantly (+35% to 2030), thanks to the competitiveness of increasingly efficient Greek production in the international market.
Oranges
Oranges produced in the EU will reach 6.5 million t (+0.4 percent/year), thanks to the stabilization of cultivated areas (after a decade of decline) and a slight increase in yields. Spain and Italy-with 52 percent and 28 percent of the fruit-growing area in the EU, respectively (2019)-will maintain leadership. Per capita consumption of fresh oranges in the EU will reach 13.2 kg by 2030. The share of European production dedicated to this, now about 80%, will rise to 83% (up to 5.4 mln t, +0.6%/year).
Imports now account for 30 percent of consumption of processed oranges and 10 percent of fresh oranges. The decline in the former is expected (-2%/year) due to the growing preference of freshly squeezed citrus juices and juices over those from concentrate. In line with, among other things, reducing domestic demand for processed oranges to 7.7 kg by 2030. And the increase in the import of fresh oranges, +1.4 percent per year, due to seasonality and higher summer demands.
Tomatoes and canned tomatoes
Total fresh tomato production in the EU is projected to decline over the next decade, toward 6.2 mln t in 2030 (down 4 percent from 2019). In fact, European producers are moving toward more profitable, smaller varieties. More value and less volume. Conversely, imports will increase, +2%/year, thanks in part to the competitiveness of countries such as Morocco, which already expresses 80% of imports (2019).
Tomatoes for processing, of which Italy is the leading producer, are expected to stabilize at around 10.7 mln t, down slightly from the current level (-5%) due to the reduction in cultivated areas. It will correspondingly increase the import of non-EU raw material (+ 4.5-8.5 percent to 2030). European production, which is expected to remain steady, is increasingly moving toward less concentrated products with greater added value (e.g., purees, canned tomatoes, tomato sauces and organic products).
Dario Dongo and Giulia Orsi
Notes
(1) EC (2020). EU agricultural outlook for markets, income and environment, 2020-2030. European Commission, DG Agriculture and Rural Development, Brussels. https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/agricultural-outlook-2020-report_en.pdf. More papers on
https://ec.europa.eu/info/food-farming-fisheries/farming/facts-and-figures/markets/outlook/medium-term_it
(2) Special Rapporteur on extreme poverty and human rights (2020). Looking back to look ahead: A rights-based approach to social protection in the post-COVID-19 economic recovery. UN Human Rights Council. 11.9.20, https://www.ohchr.org/Documents/Issues/Poverty/covid19.pdf
(3) Dario Dongo. Unfair trade practices, the EU directive 2019/633. GIFT(Great Italian Food Trade). 4.5.19, https://www.greatitalianfoodtrade.it/mercati/pratiche-commerciali-sleali-la-direttiva-ue-2019-633
(4) Dario Dongo. Transparency in the value chain, work in progress. GIFT (Great Italian Food Trade). 3/23/19, https://www.greatitalianfoodtrade.it/mercati/trasparenza-nella-catena-del-valore-lavori-in-corso
(5) Marta Strinati. Food consumption in 2021, Coop-Nomisma forecasts. GIFT(Great Italian Food Trade). 4.1.21, https://www.greatitalianfoodtrade.it/mercati/i-consumi-alimentari-nel-2021-le-previsioni-di-coop-nomisma
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Graduated in Law at the University of Bologna, now enrolled in the master of law of agri-food markets at the University of Turin. She is a practicing lawyer.
 published the report 'EU agricultural outlook for markets, income and environment, 2020-2030'. (1) A complex scenario report on possible trends in agricultural markets in EU-27 in the decade 2021-2030.){kind=link}