The first 2021 edition of the short-term outlook for EU agricultural markets concludes that the EU agricultural sector showed resilience throughout the Covid-19 crisis. The sector did relatively well thanks to increased retail sales and home consumption. In addition, prospects are favourable with a dynamic global demand and the reopening of food services (restaurants, bars, cafés) expected once the vaccination campaign is sufficiently advanced.
The report, published on 30 March 2021 by the European Commission, presents a detailed overview of the latest trends and further prospects for each agri-food sector.
Prices for all main cereals have increased, in line with global prices. Global consumption is also estimated to grow, mainly driven by animal feed demand. EU cereals production could reach 295.2 million tonnes for 2020/21, an increase of 5.3% compared to last year.
Total EU production of oilseeds is expected to increase by 3.4% compared to last year and reach 16.7 million tonnes in 2021/22, despite difficult weather conditions. As for protein crops, production grew by 7.9% in 2020/21. It could further increase by 5.2% in 2021/22, driven mainly by domestic food demand.
EU sugar production is estimated at a 5-year low, at 14.4 million tonnes for 2020/21. This drop is mainly due to a widespread yellowing disease in France. However, consumption should remain stable, leading to a reduction in stocks.
In 2020/21, EU olive oil could reach close to 2.1 million tonnes, up 10% compared to 2019/20. After an increase in 2020, EU consumption could continue growing in 2020/21 by an additional 3%. Thanks to this growth and expected stable exports, olive oil prices could continue recovering.
As for the wine sector, EU wine production in 2020/21 is expected to remain stable at around 158 million hl. Domestic use could increase by 2%, driven by ‘other uses’ such as crisis distillation. With exports expected to increase, these developments could lead to a reduction of wine stocks and a better market balance of the sector.
EU production of apples remains stable for 2020/21, at 11.5 million tonnes. With an increased at-home consumption during the Covid-19 pandemic, consumption of fresh apples per capita is expected to remain at the high level of 15.4 kg.
The 2020/21 EU orange production, at 6.6 million tonnes, is 8% higher than the previous year. After a high demand for fresh oranges in 2020, consumption is due to remain high in 2020/21 at 12.9 kg per capita.
Milk and dairy products
The EU milk production in 2021 is expected to grow by 1%, thanks to an increase in yields while the dairy herd is expected to further decline.
EU cheese and butter consumption could particularly benefit from a reopening of the foodservice and retail sales should stay at a higher level compared to the pre-Covid-19 period. In terms of production, EU cheese is expected to take 21% of the extra milk produced in 2021.
Consumption of fresh dairy products is expected to decline after a peak in 2020 but it should remain above pre-Covid-19 level.
EU beef production decreased by 1.2% in 2020, and is expected to continue decreasing in 2021 by 0.9%, despite the recovery of demand in the second half of 2021, assuming a progressive reopening of restaurants and return of tourism.
As for the pigmeat sector, production increased by 1.2% in 2020, driven by exports. However, after two years of spectacular growth, exports will decrease due to the Chinese pigmeat sector slowly recovering from the African swine fever. This will lead to a slightly lower production in 2021 (–0.7%).
In 2020, EU poultry production grew by 1% and is expected to sustain a similar growth in 2021 (+1%). The sector was affected by avian influenza detected in 18 EU countries, on top of the closure of foodservices due to Covid-19 also weighing on the market. However, 2021 should see a slight recovery in terms of exports, with export bans (related to the avian influenza) being gradually lifted.
EU sheep and goat meat production increased by 2% in 2020. However, production is projected to decrease by 1% in 2021, due to a decline in flock size and less on-farm slaughterings in Romania. The lower availability of sheep meat on the domestic market could lead to an increase in EU prices.
30 März 2021