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Medium-term projections for the EU's agricultural commodities in a resource-constrained world

The Outlook describes trends for arable crops, sugar, biofuels, dairy and meat markets until 2026, and also for olive oil, wine, fruit and vegetables.
©Željko Radojko,
Dec 09 2016

JRC expertise in modelling has fed into the latest annual issue of the Commission's Agricultural Outlook for the next decade.

Compiled by the Directorate-General for Agriculture and Rural Development, the Outlook is based on a specific set of assumptions regarding the future economic, market and policy environment. The JRC contributes with an uncertainty analysis accompanying the baseline, quantifying upside and downside risks linked to the provided market projections. In particular, this analysis takes into account the macroeconomic environment, yield variability for the main crops and selected scenarios: the reform of the Chinese maize support policies, the theoretical removal of the first generation biofuel policy in the EU, and the potential impact of climate mitigation policies on EU agriculture.

The publication describes the trends for major EU agricultural commodity markets such as arable crops, sugar, biofuels, dairy and meat markets until 2026. For the first time, this year’s edition includes an Outlook for specialised crops such as olive oil, wine, fruit and vegetables and environmental indicators such as greenhouse gas and ammonia emissions, the latter evaluated by the JRC.

The findings constitute the main reference (baseline) scenario for any assessments of potential impacts to be carried out on agricultural policies. In a context of lower energy and commodity prices, average EU cereal prices are expected to remain stable in nominal terms, according to the Outlook.

It finds that steadily growing global demand and affordable feed prices should favour the livestock sector. Despite current difficulties in the milk market, there could be opportunities for greater dairy demand within the EU. After the recent strong recovery, EU meat consumption per capita seems to be heading for a stabilisation and a slight increase for poultry and sheep meat, whose market share could show a minor upward trend. A slight increase in pork production is expected to be driven by export demand, while beef production is projected to suffer a moderate contraction.

Finally, recent trends showing stagnant consumption and growing value of specialised crops are expected to continue. The increase in EU biofuel demand and production is expected to pick up again towards 2020, accounting for a 6.5% share of biofuels in the energy mix in transport. The Outlook also presents slight upwards projections for real agricultural income due to further structural change, including a continuing reduction of the labour force.

The modelling work for the Outlook was carried out through the JRCs integrated Modelling Platform for Agro-economic Commodity and Policy Analysis (iMAP). The results of the Outlook report were presented at a dedicated two-day conference, held on 6 and 7 December in Brussels. It was opened by the Commission’s President, Jean-Claude Juncker. Panel discussions saw the participation of Commissioners Phil Hogan (Agriculture and Rural Development), Miguel Arias Cañete (Climate Action and Energy) and Karmenu Vella (Environment, Maritime Affairs and Fisheries), as well as of JRC Director-General Vladimir Šucha.

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