Decreases expected in milk and beef production across the EU in 2023
EU milk production remained fairly stable in 2022, albeit with lower milk fat and milk protein content, and so reduced processing availability.
The negative impacts of Russia's invasion of Ukraine and the ensuing high input costs and food inflation continue to weigh on agricultural markets and consumers' purchasing decisions across the EU.
The current EU macroeconomic forecast is relatively more positive than in autumn 2022, despite uncertainties about energy supply for next winter and recent financial market tensions, according to the latest short-term outlook for agricultural markets published this week by the European Commission.
High commodity prices last year helped countering high input costs and farm income increased on average, with significant sectorial and regional disparities, according to market experts.
The outlook report says that lowering energy inflation could bring some relief regarding input prices. Fertilisers, especially nitrogen-based ones, could become more available and affordable compared with 2022.
That being said, fertiliser and energy prices are still twice as high as at the beginning of 2020.
Drought and climate events will impact the supply of certain agricultural products this year, according to the report.
Animal diseases add to the uncertainty for EU livestock production. The poultry sector suffered outbreaks of avian flu, while the pigmeat sector was affected by African swine fever. This leads to reduced EU exports of these products.
The report says that EU milk production remained fairly stable in 2022, albeit with lower milk fat and milk protein content, and so reduced processing availability.
It was notably hot and dry weather that impacted negatively quality and availability of grass and feed crops, as well as imposed stress on dairy cows.
Overall, the EU dairy herd could shrink by 1%, market experts say in the report, and overall milk production by 0.2%.
Meanwhile, EU exports of cheese could grow by 2%, driven by a demand recovery in China and a stable UK and US demand.
EU beef production decreased in 2022 by 2.4%, and is expected to decrease further in 2023 by 1.6%. The EU per capita beef consumption is expected to follow a long-term declining trend and could stay slightly below 10kg in 2023, also because beef is more expensive compared to other types of meat.
Due to the limited supply, EU domestic use decreased by 2.8% in 2022, averaging at 31.8 kg per capita. This would further go down in 2023 by 5.5%.
EU poultry consumption could go up by 2.5%, and EU imports are expected to increase by 7% in 2023 to cover this demand growth.
The hot and dry weather impacted EU cereal production in 2022/2023, in particular maize with yields that dropped by 25%.
Increasing imports from Ukraine help EU regions impacted by drought to satisfy their domestic use, most of which is taken by the feed demand. The EU continues to increase its exports of wheat to respond to global demand.
An anticipated decrease in EU meat production is expected to reduce the use of cereals for feed, while food use is due to increase lightly.
