6 percent more protein area in the EU due to dispensation

The area of ​​protein crops in the EU is expected to grow by 6 percent this year, or 2.2 million hectares. The reason is the dispensation granted by Brussels for sowing fallow land. This is stated in the summer update for agricultural markets published by the European Commission.

The waiver followed the Russian invasion of Ukraine and the expectation that it would lead to a shortage of food and fodder crops. Due to the larger area, the production of protein crops is expected to increase by 19 percent this year compared to 2021.

Among other things, the farmers have used the exemption to plant more sunflowers. That area increased by 4.7 million acres, an increase of 7.8 percent on an annual basis. This season, EU sunflower seed production is expected to reach a record high of 11.1 million tonnes (+7.8 percent).

The area of ​​cereals in the EU is slightly higher than last season (0.4 per cent), with 21.8 and 10.7 million hectares of common wheat and barley respectively, an increase of 0.4 per cent and 3.8 per cent year-on-year. On the other hand, the area of ​​durum wheat, rye and triticale is expected to fall by 4.4 per cent, 0.7 per cent and 2.0 per cent to 2.1, 1.9 and 2.6 million hectares respectively.

Dry spring inhibits grain production

The maize area is also expected to be 1 percent lower than in the 2021/2022 season. Due to the hot and dry spring in the EU’s main cereal production regions, yields will be lower than last year and total EU cereal production is expected to reach 286.4 million tonnes (2.5 percent year / year).

Production of common wheat is estimated at 125.0 million tonnes (3.9 per cent), barley at 52.2 million tonnes (+0.4 per cent) and maize at 72.1 million tonnes (1.4 per cent). Given the high feed costs and the expected lower meat and milk production in the EU, demand for animal feed is expected to fall by 1.3 percent in 2022/2023 to 158.8 million tonnes.

The use of grain for the production of biofuels is also expected to decrease by 3 percent due to the lower competitiveness of grain as a raw material for biofuels and the stagnation of the production of biofuels. Lower demand ensures availability in the EU market despite reduced production.

Record dairy prices

Dairy prices in the EU are now at a record high. Despite this, the margins of milk producers are still tight due to the high costs of input (feed and energy in particular) and logistics. As the weather forecast for grasslands remains negative, the milk supply in the EU may also fall by 0.6 per cent in 2022.

Beef production in the EU is expected to decline in 2022 despite high prices. This is primarily due to a declining livestock population as a result of a restructuring of the sector. For the full year, EU meat exports are expected to grow by 4 percent, driven by demand from high-value markets such as Canada, Japan and the UK.

Rising environmental measures, declining export prospects, persistently high input costs and outbreaks of African swine fever lead to an expected decline in EU pork production by 4.7 percent in 2022. Britain is again the EU’s first export destination since China’s imports due to African swine fever have limited.

Historical epidemic

The poultry industry is facing an epidemic of highly pathogenic avian influenza (HPAI) of historic proportions. Since October 2021, 21 EU countries have been affected by HPAI outbreaks in poultry. High input costs also affect the sector. Therefore, EU poultry production will remain stable in 2022 despite high broiler prices. Trade with the UK is back to pre-Brexit levels.

More detailed information on production, consumption and prices in the agricultural sectors can be found in the report below.

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