EC – Agricultural Outlook, 2023

This Medium-term Outlook report examines the main drivers that will impact EU agriculture until 2035, including climate change, consumer demand, and the structure of the farming sector. The report analyzes how these drivers will affect agricultural productivity, trade, and consumption patterns in the EU. Climate change and pressures on natural resources like water and soil pose challenges to agricultural productivity growth. This could result in lower crop yields and a shift in agroclimatic zones. However, the trend of increasing farm sizes is expected to contribute to productivity growth, albeit at a slower pace than in recent years. The report projects that the EU will continue to be a net exporter and play a role in global food security. The convergence of productivity levels among Member States and the sustainability of agricultural production systems are seen as essential factors in achieving this. Consumer concerns about the environmental impact of their diets are expected to result in lower meat consumption, particularly beef and pig meat. On the other hand, consumption of dairy products is expected to stabilize, while plant protein consumption, such as pulses, could increase. The Common Agricultural Policy (CAP), along with a rule-based trade system and innovation, are identified as crucial in helping EU farmers adapt to changing market conditions and meet evolving societal demands. However, macroeconomic conditions and policy challenges related to funding public expenditure may create uncertainties. The report also forecasts relative changes in the types of land used for agriculture, with shifts from cereals to soybeans and pulses expected. Yields of cereals and oilseeds are projected to remain stable, thanks to advancements in precision farming and improved soil health. The demand for animal feed in the EU is expected to decline, leading to a reduction in the EU's production of pig meat, beef, and dairy products. The use of vegetable oils, particularly palm oil, is also expected to decline due to reduced demand for biofuels. Sugar beet production and consumption are also expected to decline due to consumers shifting to lower sugar intake diets.