EU agricultural outlook 2021-31: lower demand for feed to impact arable crops

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09 December 2021, EU: Total agricultural land is due to slightly decline over the outlook period, with forest area exceeding agricultural land by 2031. EU cereal production is expected to decline, driven by a lower feed use. In contrast protein crops production will grow significantly, thanks to their environmental benefits. These are just a few of the projections from the European Union agricultural outlook for 2021-31 report published on 9 December 2021 by the European Commission.

Total utilised agricultural area (UAA) is projected to slightly decline over the outlook period, to 160.5 million hectares in 2031. This reduction is due to lower yields making production on marginal land less attractive, combined with a lack of generational renewal in remote rural areas and competition for land with forest and urban areas. Forest areas are projected to continue their increase and exceed agricultural areas in 2031, reaching 161.4 million hectares, thanks to the role their play in the climate challenge.

Most of the decline in agricultural land will come from crops areas, and cereals in particular. In contrast, conversion from conventional to organic farming is expected to remain strong in 2021-31. Even without additional support and the future Common Agricultural Policy not yet implemented (as assumed for this modelling exercise), organic land could reach 15% of total EU agricultural land in 2031.

The 2.8% decline of EU cereal area, compared to 2021, combined with a decrease in yield, could translate into a reduction of cereal production. Production is expected to be down to 276 million tonnes in 2031 (-2.5% compared to 2021). In terms of consumption, the EU use is projected to decrease by 2.7%, reaching 254.8 million tonnes, driven by a decline in feed use. As for trade, the EU is expected to remain competitive but will face strong competition leading to a reduction in market shares.

Regarding protein crops, the dedicated area is projected to increase by 19% over the outlook period. As these crops continue to attract interest thanks to their agronomic benefits and market prospects, yields are projected to increase by 14% by 2031. Production is expected to grow significantly by 33% to 5.2 million tonnes in 2031. EU consumption will also grow in 2021-31, to reach 5.6 million tonnes in 2031, up 14% compared to 2021.

As for oilseeds, the area is expected to be similar to current levels by 2031, at 10.7 million ha. It will peak in the middle of the outlook period but start to decline due to lower demand for feed and oils. EU production is due to reach its highest in 2027, at 32.1 million tonnes. It is then projected to decline to 31.2 million tonnes by 2031.

The total EU sugar beet area is expected to stabilise at almost 1.5 million ha in 2031. As for EU sugar production, it is due to increase slowly, from an average of 15.5 million tonnes in 2019-21 to 16 million tonnes in 2031. EU consumption is projected to decline by 0.5% per year, to 15.9 million tonnes. This is mainly linked to a consumer shift to healthier diets.

The EU agricultural outlook report for 2021-31 contains all relevant market data, accompanied by an explanation of assumptions, and a description of the macroeconomic environment. The projections and scenarios described in the report are discussed at the annual EU agricultural conference, taking place online on 9-10 December 2021.

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