EU

EU agricultural markets remain stable despite the Russian invasion of Ukraine

EU agricultural production continues to be impacted by the consequences of the unjustified Russian war in Ukraine, by surging energy prices, increasing input costs and food inflation throughout the EU.

Posted on Oct 21 ,04:38

In addition to geopolitical instability, the EU recorded one of the hottest summers in history, which significantly affected summer crops, such as maize, soybeans and sunflower. Meteorological conditions have also been difficult for livestock producers and animals who suffered from heat stress and less feed. Despite obvious challenging conditions, the EU agricultural sector is standing strong. Food availability is not at risk in the EU. Moreover, EU exports of cereals are expected to reach 51 million tonnes, which is 6.5% above last season and 20.9% above the five-year average.

Livestock producers are among those being the most impacted by the record energy and input costs. Despite high prices for beef, pigmeat and poultry, these difficult conditions limit the production in these three sectors. In 2022, EU beef production will decrease by 0.6%, EU pigmeat production by 5% and EU poultry production by 0.9%. High prices also weigh down on EU exports of these products, with expected decreases by 1%, 17% and 2.2% in 2022 for beef, pigmeat and poultry respectively.

The total EU cereal production is now forecast to reach 270.9 million tonnes, which represents 7.8% less than last year. The sharpest decrease concerns maize at 55.5 million tonnes, a 23.7% decrease year-on-year. This is mainly due to summer drought. Soft wheat production will only experience a 2.4% decrease with a forecast production of 127 million tonnes. Trade of cereals keeps increasing with EU soft wheat exports expected to reach 36 million tonnes, an increase of 23% year-on-year.

Thanks to higher expected yields of protein crops, the EU production is estimated to grow by 1.4% and reach 4.32 million. Regarding oilseeds, the area under these crops in the EU reached an all-time high in marketing year 2022/23 of 12.2 million hectares, an increase of 14.6% year-on-year. Drivers for this development were soaring prices of oilseeds and especially vegetable oils and the temporary derogation to allow cultivation of certain crops on set-aside land. This significant expansion has led to an increase in harvest of 7.5%, thus cushioning the impact of drought on yields.

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