European Commission predicts medium-term growth for all EU meat sectors, bar beef

"After two years of sharp decline, EU beef production is expected to recover on the back of recent dairy herd increases. Bigger populations and stronger economic growth in developing countries are expected to support higher meat demand and favour a rise in EU meat exports,"​ the Commission predicted.

There is still steady growth in world consumption of dairy products, the survey said. Much of the extra demand from African and Asian countries will be supplied by EU producers, it predicted. 

Part of the growing demand is caused by population increases and urbanisation in these regions, the Commission said, and while these growth trends were slowing down, consumption growth was still greater – at 2% above population increases, on average.

However, the report warned beef production was expected to return to its "historical decline"​ soon after, to reach 7.6 million tonnes by 2024. This drop in beef production will continue, although at a slower pace than earlier in the 2008 economic crisis. In the short term there will be more beef as a result of recent dairy herd increases, but thereafter a slow reduction in herds will be seen up to 2024.

But with this major exception, the Commission outlined optimistic prospects for the industry. Pork is expected to recover next year after three years of reduced supply: "EU pig meat exports are expected to grow steadily, supported by sustained world demand and a competitive pig meat sector."​

After several years of decline, sheep and goat meat production are expected to stabilise at current levels and profitability will increase on both products.

But the brightest prospects are for poultry, whose production and consumption will expand "significantly"​ during the next 10 years (both by 7% in 2040 as compared with the current years).

"Poultry meat is enjoying several comparative advantages over other meats, including price affordability, convenience, a healthier image, lower production costs, shorter rearing times and reduced investment needs,"​ the Commission stated. "By 2020 poultry will be the pre-eminent meat in the world,"​ an EU official claimed.

Although higher per capita meat prices plus the economic crisis have caused consumption to reach its lowest for 11 years (64.4kg in retail weight per person per year), consumption overall will recover until 2016 as more meat comes onto the market, but should return to a downward trend thereafter. By 2024, per capita consumption will fall below 65kg in retail weight, bringing it close to the 2012 level, predicted the Commission.

Delegates at a one-day conference staged in Brussels to launch the outlook report were told by Tassos Haniotis, director of economic analysis, perspectives and evaluations for the Commission’s directorate general (DG) for agriculture, that because EU exports had overtaken imports "agri-trade is one of the few promising spots in the global economy".​

He instanced the EU’s decline in growth in general; uncertainty over the price of crude oil; lower energy prices in the USA; food safety issues; and slowdowns in Chinese and Indian consumption as parts of the "diverse and uncertain environment".​

World demand for poultry is growing and this in turn is supporting sustained exports and firm prices. Likewise with pig meat: although no EU consumption growth is foreseen, rising exports are driving the pork market – especially in China – and this supports increasing EU and world prices.

No further decline in sheep meat production was in prospect, the Commission declared. Its improved profitability, together with better returns in goat production, will see these markets stabilise with the exports of live animals and meat.

Nonetheless there are better price prospects for much of the industry at a moment when the EU’s economic growth is expected to recover, but remain below 2% a year (except in 2017.) The euro’s value is also expected to appreciate slightly to US$1.37/€1 in 2024, making export sale a little harder to score.

The Commission predicts real incomes in agriculture will grow across all 28 member states by approximately 6% over the next 10 years. Two opposing factors influence are playing out here, the Commission says. Income in real terms deteriorates as production costs grow faster than output prices. On the other hand, this is likely to be more than offset by an anticipated decline in labour costs in the industry caused by technological and structural changes.

Climate change also has to be factored into the outlook’s predictions, Stefan Niemeyer, action leader of the AGRI4CAST division of the EU’s Joint Research Centre (JRC), told the conference, not least for its high variability. Although global warming is "unequivocal"​ and CO2 levels are growing, in the European region, they are increasing more in the east than in the western part of the continent. In total there are fewer frost days in the EU these days.

Annual warm spells have been increasing over the past 30 years, meaning that growing seasons are lengthening and crop cycling is speeding up, while rain is decreasing in Italy and Spain but showing an increase in the Nordic nations, which can expect to benefit from climate change.

Interestingly, vegetarians were given short shrift by the conference, with speakers characterising many as ‘flexitarians’ who eat meat from time to time while making a heavy point when they choose not to. Some 84% of EU consumers claiming vegetarianism return to meat consumption, one-third of them relapsing after three months, the conference was told.