Short-term outlook of EU agricultural markets: gradual but fragile return to stability
The general macroeconomic and food price environment points to possible improvements in demand for agri-food products in most sectors. Nonetheless, the outlook remains subject to a high degree of uncertainty, linked to weather events, geopolitical conflicts and animal and plant diseases. Published by the European Commission, the autumn 2024 edition of the short-term outlook report for EU agricultural markets presents the latest trends and prospects for key agricultural markets.
According to the report published, agricultural markets are showing signs of stabilisation. Food inflation has been declining, and food prices have remained relatively stable over the last months for most products, though they are on average 32% higher compared to 2020. An increase in demand for agri-food products could be supported by the expected EU GDP growth and steady moderate inflation.
The EU fertiliser market is also gradually stabilising, with trade flows returning to normal and domestic production showing signs of recovery. However, affordability remains a concern for farmers, primarily due to declining arable crop prices. The lower crop yields in different regions of Europe in 2024 could cause cash flow issues for arable crop farmers, potentially affecting fertiliser purchases in spring 2025.
The continued structural adjustment drives a decline in EU beef production by an expected 0.5% in 2024 and 1% in 2025. Despite tight supply, EU meat exports continue to perform well, in particular to the Turkish market. EU per capita beef consumption dropped by 1.7% in 2024 and is expected to decline further, by 1.2% in 2025. EU pigmeat production is recovering in some EU countries indicating a mixed trend for the sector, but overall, EU pigmeat production is expected to slightly decrease by 0.5% in 2024, and 0.2% in 2025. Lower demand from China could slow down EU exports by -2.5% in 2024. For 2025 a further decrease of 2% year-on-year is foreseen. The EU poultry sector is witnessing rather good market prospects in 2024, with a 4% growth in production and a 3% increase in exports. In 2025, production could increase by 0.9% and exports by 2%. EU per capita consumption is expected to increase in 2024 and 2025. Uncertainty around HPAI incidence in Europe and the Americas remain high concerns for the sector. The historically low EU sheep flock pushed slaughtering down by 4.9% in 2024. For 2025 a further drop of 1% is expected year-on-year. Sustained demand and high domestic prices keep imports high (+2% in 2024), while meat exports decline further by 10% for lack of competitiveness. Overall, EU per capita meat consumption is expected to increase slightly in 2024 to 66.8kg (+0.8% year-on-year) and to stabilize in 2025.
EU beef production stabilising in 2024
EU beef production increased by 3% in the first half of 2024 year-on-year, mainly due to a significant increase of slaughtering in IT (+9%) and PL (+20%). The increase may have multiple causes, such as bad grazing conditions in central Europe and a growing demand in certain export markets (Türkiye). However, by the end of 2024, beef production is expected to decline slightly (-0.5%) due to a shortage of young bovines in some EU countries (e.g. IT and ES). The tight beef supply continues to support EU beef producer prices and the price of live animals. The moderation of feed prices and high carcass prices are expected to favour better margins for fatteners. In 2025, the downward trend in beef production is expected to continue (-1.0%) year-on-year due to shrinking herds. As consumer prices remain high, due to tight supply, per capita EU beef consumption in 2024 is expected to decline slightly to 9.6 kg (-1.7% year-on-year).
Beef exports infreasing, while imports fall
Despite limited supply, EU beef exports increased in the first half of 2024 (+41 600 t or +17% year-on-year). The Turkish market is the main driver (+28 100 t), next to growing exports to Algeria, Switzerland and the Philippines. By the end of 2024, EU exports are expected to increase by 10% year-on year. In the same period, EU exports of live animals declined by 16% year-on-year, due to a relative shortage of live animals and difficulties to reach some markets for geopolitical reasons. Overall, exports of live animals are expected to decrease by -2% in 2025 year-on-year. In 2024, the EU market remained less attractive for imports, with a decline of 2.2% in Jan-June year-on-year. Imports from Brazil decreased substantially (-15%), while imports from the UK were 0.2% down. The main EU partners, including South American countries, find more rewarding markets in other parts of the world (e.g. the US), thanks to a relative tight beef market at global level. By the end of 2024 a decrease of 2% is expected year-on-year. In 2025, meat imports could further decline by another 1.5% due to an expected lower production in Brazil next year.
Pig meat
Production recovery in some EU countries
In the first half of 2024, EU pigmeat production went up by 1.7% year-on-year. The biggest increases were recorded in PL with 77 000 t (+9%), in HU with 18 000 t (+8.3%) and in DE with 18 000 t (+0.9%), although production declined in ES by 5 000 t (0.2%). In the same period, fewer animals have been slaughtered in DK, but average carcass weights increased (+17 000 t, +2.5% year-on-year). The increase in EU supply combined with limited demand led to a decline in domestic prices from May 2024, even though the average quotation remained significantly above the 5-year average. As both feed and piglet prices decreased, margins remained reasonably positive in the first half of the year. African swine fever outbreaks remain a risk for production. Overall, a production decrease of 0.5% is expected for 2024 and a further drop by another 0.2% for 2025 year-on-year. Consumption has been stable so far in 2024, without the usual increase in the summer months. EU per capita consumption is expected to decrease further to 30.9 kg by year end (-0.4% year-on-year). For 2025, EU per capita consumption is expected to stabilize at 30.9 kg year-on-year.
EU prices challenge EU exports
Less competitive EU pigmeat prices make exports to the global market a real challenge. In the first half of 2024, EU exports recorded a decline of 6% year-on-year, mainly to China (-27%). In addition, exports to the UK decreased in JanJune (3% year-on-year). Strong price competition from Brazil and the US, created challenges for EU exports to some highvalue markets (Japan, Australia), although there were gains in South Korea and lower-value markets such as the Philippines and Viet Nam. Overall. EU exports in 2024 could be down by 2.5% year-on-year. If the price gap between EU and international competitors continues to decrease, this could boost EU exports on the international market. Overall, for 2025 a decrease of 2% is expected year-on-year. With possible countervailing duties from China, pigmeat exports in 2025 could further decline. Total EU pigmeat imports were 53 711 t in Jan-June 2024 (+1% year-on-year). Imports from the UK account for about 2/3 of total EU pigmeat imports and decreased by 2.2% in the same period. At the same time, imports from Chile increased by 8 600 t (+173%) due to the new FTA between Chile and EU. However, with the expectation of a declining UK pigmeat demand in 2025, EU imports could decline by 2% in 2025.
Poultry
The recovery of theEU poultry sector continues
In 2024, EU poultry production continues increasing since the recovery in 2023, thanks to a milder HPAI season, as well as to more affordable feed costs and favourable output prices. In the first half of 2024, EU slaughtering increased by 4.7% year-on-year. Production increased in almost all EU countries except e.g. SE, NL and LT. In particular, large increases were reported in FR (+116 000 t or +15.9%) and HU (+34 000 t or +13.9%). By the end of 2024, production is expected to increase by 4% year-on-year, taking into consideration a possible increase in input costs that would impact margins. A smaller production increase of 0.9% year-on-year is foreseen in 2025 due to price competition from other meats and a more stable global demand. Despite the milder season of HPAI outbreaks this year, the risk remains for the upcoming seasons. EU producer prices increased steadily in the first half of 2024 remaining above EUR 2 500/t.
EU exports increase despite upward eu prices
In Jan-June 2024, EU imports decreased by 20 370 t (-4.5% year-on-year). However, EU imports from the UK recovered significantly (+32% or almost +20 000 t) after last year’s steep decline. On the other hand, EU imports decreased from Ukraine (-12%), Brazil (-12%) and Thailand (-11%). Overall, EU imports are expected to decrease by 0.5% in 2024. Uncertainty about poultry imports coming from main origins Brazil, the UK and Ukraine could impact these developments significantly. In Jan-June 2024, EU exports increased by 11% year-onyear, in particular towards the UK (+7 600 t) and most destinations in Africa and Asia: Saudi Arabia (+7 200 t), Viet Nam (+10 800 t), Philippines (+33 170 t) and DR Congo (+9 190 t). By contrast, exports to Ukraine declined (-12 540 t). By the end of 2024, EU exports are expected to increase by 3% year-on-year and could be maintained in 2025 if EU traditional outlets for poultry are maintained. Higher domestic availability through EU production, and the favourable image of poultry for European consumers compared to other animal proteins, are expected to support EU per capita consumption growth in 2024 by close to 1 kg (+3.5% year-on-year). For 2025, EU per capita consumption could stabilize at 25.2 kg (+0.6% year-on-year).
Sheep/Goat meat
EU flock continues decreasing
EU sheep and goat production declined by 7.4% in the first half of 2024, year-on-year, driven by the continuous structural decline of the goat and sheep flocks, as well as unfavourable weather conditions and grass availability. Main producing Member States as ES and FR had to face declines of 6 100 t (-10%) and 2 800 t (6%) respectively, in the same period. Outbreaks of diseases in herds in western Member States might affect further the availability of animals for slaughter by the end of the year. Overall, EU sheep and goat production may fall by 5% in 2024, despite record high prices, and be followed by a lower reduction in 2025 (1%). Being the most expensive type of meat, EU consumption of sheep meat is likely to suffer from inflationary pressures as other red meat types. Although it has a favourable positioning within consumer baskets as a seasonal and traditional product (for example during religious and cultural festivities), the combination of lower availability and high prices are expected to drive a slight decrease in consumption in 2024 to 1.2 kg (-3.2% year-on-year). For 2025 the per capita consumption is expected to stay on 1.2 kg (-0.6% year-onyear).
EU exports of sheep to decfrease
In the first half of 2024, EU sheep meat exports fell by 14%, driven by lower exports to the UK, Switzerland, Israel, Qatar, Saudi Arabia and the United Arab Emirates. This is mainly due to relatively high EU prices leading to less competitiveness on the international markets. As this situation is not expected to change in the short term, sheep meat exports may fall by 10% by the end of 2024. If prices ease, a recovery of about +2% year-on-year could be expected in 2025. EU exports of live animals decreased by 2% in the first half of 2024 yearon-year, unfavoured by high domestic prices and lower availability. Growing exports to Morocco and Algeria, particularly from ES, have partially compensated decreases to Jordan, Saudi Arabia and Israel. Overall, exports of live animals are also set to fall by 2% for the whole 2024 due to the difficult geopolitical situation. In 2025, a further decline of 2% is foreseen. EU imports of sheep meat decreased by 10% in Jan-June, with declines from the main EU suppliers: UK (17%) and New Zealand (2%). However, 2024 EU imports may grow by 2% year-on-year, and keep that level in 2025 thanks to the recovery of production in New Zealand and Australia, and deviation of more of their products to EU markets.
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