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Home European Commission EU outlook for agriculture favorable; also greater grain harvest

EU outlook for agriculture favorable; also greater grain harvest

According to the European Commission, the outlook for the agricultural sector is “bright” after the industry showed resilience during the Covid-19 pandemic last year.

In the first edition of 2021 of the short-term outlook released yesterday (Tuesday, March 30) - Brussels emphasized that the sector was doing relatively well thanks to increased retail sales and home consumption.

The European Commission expects global demand and the reopening of food markets to increase later this year once vaccination in the EU countries is sufficiently advanced.

Beef production decreased by 1.2% in 2020 and is expected to continue to decline by 0.9% in 2021, despite the assumed recovery in demand in the second half of 2021.

Sheep and goat meat production has increased by 2% in 2020. However, production is expected to decline by 1% this year. The lower availability of mutton could lead to an increase in EU prices.

As for the pork sector, production increased by 1.2% in 2020, thanks to exports. After two years of spectacular growth, exports will decline as the Chinese pork industry is slowly recovering from African swine fever (ASF). This year this will lead to an expected slightly lower production of pork (–0.7%).

In 2020, poultry production in the EU grew by 1% and is expected to experience similar growth in 2021 (+ 1%). The sector was affected by avian flu, which was diagnosed in 18 EU countries. However, a slight recovery in terms of exports should take place in 2021, with export bans (related to avian flu) gradually being lifted.

The milk production of the EU in 2021 is expected to grow by 1%, while the total European dairy herd is expected to decrease further. Cheese and butter consumption could benefit from the reopening of food services and retail sales should remain at a higher level than in the pre-Covid-19 period.

Prices for all major grains have risen, in line with world prices. Global consumption is also expected to increase, mainly due to the demand for animal nutrition. Grain production in the EU could reach 295.2 million tonnes this season, an increase of 5.3% compared to last year.


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