Forget veganuary, global meat consumption is expected to continue growing by 1.4% per year, thanks to an increasing population and higher income in developing countries.

That was the welcoming news from the EU Commission's medium-term outlook for agricultural markets, covering the period from 2021 to 2031.

The report assumes the global economy rebounded in 2021, and will level off at an annual average level of growth of 2.7% by 2031. The EU economy is expected to recover to pre-COVID-19 levels by 2023, despite the increase in energy and commodity prices, which is contributing to high inflation at present.

The outlook assumes EU inflation will stabilise at 1.9% per year by 2025, with the oil price projected to rise moderately to 80 USD/bbl in 2031.

With demand for meat rising, an additional 3.4m tonnes of imports globally will be needed to close the gap between domestic consumption and production in many countries. However, sustainability is expected to play an increasingly prominent role in EU meat markets, both for producers and for consumers.

As consumers’ environmental awareness, health considerations and convenience trends change, per capita EU meat consumption is projected to slip to 67kg by 2031 from 69.8kg in 2018.

Demand for feed from arable crops is projected to fall due to the decline in the EU pig, beef and dairy herds.

EU beef production is expected to fall by 600,000 tonnes (-8%) between 2021 and 2031. The total EU cow herd is set to decrease by 2.1m head (-7%) by 2031. The dairy herd should decline progressively as milk yield increases, while the suckler cow herd is set to decrease to 10.1m head by 2031 (-665,000 head), due to low profitability and increasing environmental concerns.

The report points out EU beef consumption, low in 2020 and 2021 due to the effects of Covid-19, will continue its downward trend. By 2031, it could drop from 10.6kg to 9.7kg per capita. However, world demand for beef is increasing.

EU beef exports are due to improve moderately by 2031 (+0.6% per year), due to rising demand with existing trade partners. The UK will remain the main destination, and trade should rebound after the decline since 2019, but probably not to the same level as before Brexit.

Read more: How will imports affect beef and sheep prices

Current restocking in Brazil and Australia will support prices in the short run, helped by export restrictions in Argentina. Afterwards, beef prices are expected to stabilise around 3750€/t due to high international demand.

Looking at the sheep sector EU meat production is expected to increase slightly by 0.3% per year in 2021-2031 (to 660,000t), underpinned by the implementation of voluntary coupled support, tight world supply, and improving prices for producers. EU per capita consumption of sheep meat is expected to grow to 1.4kg per capita by 2031 and reach 1.4kg per capita.

UK imports currently represent almost half of EU sheep meat exports, however there is a lot of uncertainty surrounding the possible impact of trade agreements between the UK and Australia/New Zealand on EU exports. Australia and New Zealand are nevertheless expected to focus more on closer Asian markets.

EU sheep prices are expected to trend upwards, too following developments in world markets with a significant gap between prices in the EU and those in New Zealand and Australia remaining.

Meanwhile, uncertainties remain in the pig sector due to African Swine Fever. China is expected to have fully recovered its own production capacity by 2026, drastically reducing its reliance on imports. According to the report, that should have a massive impact on EU exports which are predominantly directed to China at the moment. While exports increased by 5.3% per year in 2011-2021, they are projected to decrease by 1.9% per year in 2021-2031.

EU pig meat consumption is expected to continue falling and production to start declining. In the EU, health, environmental and societal concerns should continue shifting consumer preferences and weigh negatively on EU pig meat consumption. As a result, apparent EU pig meat consumption per capita is projected to decrease by 0.5% per year, from 32.5 kg in 2021 to 31 kg in 2031.