The European Commission’s short-term outlook report for the EU agricultural market notes many uncertainties around the impact of coronavirus and the economic recovery. But it says the food supply chain has proven resilient throughout the crisis. As lockdown measures are progressively lifted over Europe, food service demand should pick up, although not back to 2019 levels as household purchasing power will be a constraint.

EU cereal production for 2020/21 is forecast at 286.3 million tonnes, 2.7% lower than 2019/20, but l 1.7% above the 5-year average. EU cereal consumption is estimated to have fallen 0.6% in 2019/20, with lockdown in the last quarter reducing demand from bakeries and foodservice. However, this should recover in 2020/21.

Rapeseed production in the EU for 2020/21 should be similar to 2019/20 at 15.4m tonnes, with sunflower production due to rise 3.7% to 10.4m tonnes. EU output of soya beans should reach 2.8m tonnes and protein crops 4.5m tonnes respectively. Crushing volumes could fall with stable protein meal demand and a slow recovery in vegetable oils use.

Sugar production is expected to remain at 2019/20 levels, despite a 3% decrease in sugar beet area. Demand from both bioethanol and foodservice is expected.
EU milk collection could reach close to 144 million tonnes in 2020, 0.7% up on the 2019 levels and higher than forecast last spring. Grazing and forage prospects are good. Germany is expected to contribute most of the growth, followed by Italy, Spain and the Netherlands. However, an increase in retail cheese demand will not outweigh foodservice losses.

The increasing EU retail demand for cheese is not expected to compensate for foodservice losses, despite exports that are expected to rise by 2%. Competitive EU prices in 2020 saw significant increases in butter, whole milk powder and skimmed milk powder exports.

Turning to EU meat production, beef production is expected to fall by 1.7% in 2020 in line with lower foodservice demand after lockdown. There has also been some early slaughtering at lower weights due to constrained feed availability during the dry spring.

Poultry production could decline by 2% in 2020, although the sector has adapted to lower demand and lower prices (particularly for poultrymeat other than chicken – ducks, guinea fowl, pigeons and quail).

EU pigmeat production should increase by 0.5% in 2020, helped by favourable prices and solid export prospects, especially to China after the African Swine Fever epidemic there. But sheep and goat meat production are expected to decline by 1.5% this year with lower foodservice and home consumption particularly the loss of the Easter and Ramadan celebrations, due to lock down, plus supply shortages due to logistical issues.

The Commission expects the pandemic restrictions plus limited EU availability to lead to an overall 2.5% EU decrease in meat consumption to 65.4 kg per capita over 2020.

The full report is available via the website.