News7 December 2018Brussels, BelgiumAgriculture and Rural Development
EU agricultural outlook 2018-2030: Growing export demand for dairy products as world population expands
There will be higher export demand for traditional European dairy products such as cheese as the world’s population and incomes increase whilst the poultry is projected to be the only growing meat product market in the EU. These were the key findings of the EU agricultural outlook (9.1 MB - PDF) released 7 December 2018, which includes observations about the projected performance of European agricultural markets for 2018 to 2030.
As the world’s consumer base grows due both to an increased population and rising incomes, demand for dairy is expected to rise. Global trade in this sector will however increase at a much slower rate than in the past decade, with the EU and New Zealand dominating the market. By 2030, the EU could supply close to 35% of the global demand. This will focus more extensively on value-added products such as organic products or those with protected geographical indications.
Average annual increase of dairy product global trade (million t milk equivalent)
EU exports of cheese, butter, skimmed milk powder, whole milk powder and whey powder are expected to grow on average by around 330,000 t of milk equivalent per year. As for the EU market, close to 900,000 t of additional milk per year would be needed to satisfy its growth for traditional dairy products, which is mainly cheese. By contrast, European liquid milk consumption is expected to continue declining in the EU.
EU milk production should experience a modest increase over 2018-2030, at 0.8% per year on average. Production is estimated at 167 million t in 2018, and should reach 182 million t by 2030. Finally milk yield should also increase by 2030, 17% above the level of 2017. However, it will be at a slower pace than in proceeding decades due to environmental constraints on further dairy production.
Campaigns promoting lower dairy product intake because of the climate and environmental footprint of livestock products, as well as an increase in lactose intolerance claims, will have a downwards influence on the consumption of dairy products. However, growing consumption of convenient foods such as ready meals, burgers and frozen food will result in a higher use of dairy ingredients, for example, cheese.
Meat market projections
By 2030, the EU meat market will be influenced by changes in consumer preferences, export potential, profitability, and for beef, changes in the dairy sector. Overall EU meat consumption will decline, going from 69.3kg per capita in 2018 to 68.7 kg in 2030. It will be driven by lower availability, even with higher imports, but will also be affected by a preference for lower meat intake and meat substitutes.
In addition, at EU level, consumers will choose to consume different meats. For example pork and beef consumption are expected to decline, while poultry will be increasingly consumed. Sheep meat is also expected to increase, thanks to the diversification of meat diets and changes in the EU population structure.
Since the low of 2013, EU beef production recovered at an estimated up 1.6% in 2018, estimated at 8.2 million t. However, production is expected to decrease again, influenced by a smaller herd, low profitability and declining demand. Competition on the global market will also be strong, leading to first a fall in prices for the first half of the outlook period followed by price stabilisation towards 2030.
As for sheep and goat meat, thanks to improved returns for producers, maintenance of coupled support and sustained domestic demand, production will recover and increase during 2018-2030. It will reach 950,000 t in 2030, compared to 903,000 t in 2018. EU price will stabilise to a level higher than between 2010-2017.
EU consumption of pork will decrease from 32.5 kg per capita in 2018 to 31.7 kg in 2030. This decline will be compensated by exports, with world import demand continuing to grow at a rate of 0.7% per year during 2018-2030. Most exports will be to China, despite strong competition from the US and Brazil.
EU per capita consumption by meat type (kg per capita)
Poultry is the only meat that will see a strong increase in EU production and consumption. Compared with other meats, it enjoys certain advantages such as affordability, absence of religious restrictions, a healthy image, limited GHG emissions, lower production costs and lower required investments. By 2030, EU production should reach 15.5 million t, compared with 14.2 million t in 2018. Global demand will also be growing, supporting increasing EU exports, thanks to the valorisation of different cuts of poultry meat and various destinations.
Further information and data can be found in the EU agricultural outlook report for 2018-2030, along with an outlook for EU agricultural markets such as arable crops and fruit and vegetables as well as analysis of the environmental impact of the sector. Prospects for the meat and dairy market is also discussed during the EU agricultural outlook conference in Brussels on 07 December.
Report: EU Agricultural Outlook for markets and income 2018-2030