According to the European Commission, the outlook for the agricultural sector is "favorable" after the industry showed resilience during the Covid-19 pandemic last year.
In the first 2021 edition of the short-term outlooks published yesterday (Tuesday, March 30) – Brussels emphasized that the sector performed relatively well thanks to increased retail sales and home consumption.
The European Commission expects that later this year global demand and the reopening of food markets will increase once vaccination in EU countries has progressed sufficiently.
Beef production declined by 1.2% in 2020 and is expected to continue decreasing by 0.9% in 2021, despite the assumed recovery in demand in the second half of 2021.
Sheep and goat meat production increased by 2% in 2020. However, production is expected to decrease by 1% this year. The lower availability of sheep meat could lead to a rise in EU prices.
Regarding the pork sector, production rose by 1.2% in 2020, thanks to exports. After two years of spectacular growth, exports will decline as the Chinese pork sector slowly recovers from African swine fever (ASF). This will lead to a slightly lower pork production this year (–0.7%).
Poultry production in the EU grew by 1% in 2020 and is expected to see similar growth in 2021 (+1%). The sector was affected by bird flu detected in 18 EU countries. However, in 2021 a slight recovery in terms of exports should take place, with export bans (related to bird flu) being gradually lifted.
EU milk production in 2021 is expected to grow by 1% while the total European dairy herd is expected to continue to decline. Consumption of cheese and butter could benefit from the reopening of food services and retail sales should remain at a higher level than before the Covid-19 period.
Prices for all major cereals have risen, in line with global prices. Global consumption is also expected to increase, primarily due to demand for animal feed. EU grain production could reach 295.2 million tons this season, an increase of 5.3% compared to last year.