Eu agricultural Outlook: Impact of reduced fat consumption and reduced meat and dairy imports in China

2022-07-02 0 By

On December 19, 2021, the Directorate General for Agriculture and Rural Development of the European Commission issued the eu Agricultural Outlook Report 2021-2031, which specifically stated:With total fat consumption in the EU falling to levels recommended by the World Health Organisation, production of butter, cheese and pork in the EU is expected to fall, with exports making up for some of the forgone EU consumption.Pork from the European Union has been most affected by China’s move towards self-sufficiency in meat and dairy products, resulting in lower production and prices.Lower domestic prices lead to increased consumption within the EU!The first scenario looks at a gradual reduction to the EU level of 30% of total fat consumption recommended by the World Health Organization.The switch is expected to reduce the average person’s daily calorie supply by 304 calories in 2031.Carbohydrates and protein were reduced by a total of about 20 calories, while the plant-to-animal calorie ratio remained stable (2.5:1).The scenario resulted in a reduction in per capita weekly consumption of butter by 17 g, cheese by 84 g, pork by 119 g, vegetable oil by 179 g and fresh dairy by 345 g.Consumption and prices of high-fat goods fell, but high import demand from the rest of the world improved the EU’s trade balance.In this case, for example, the EU became a net exporter of sunflower oil with a net export volume of 200,000 tons, probably driven by increased import demand from Asia and the Middle East.Pork consumption fell 19 per cent, but most of the decline was made up for by higher exports.In this case, butter and cheese production fell by 2% and 13% respectively due to lower demand.For butter, much of the forgone consumption was offset by higher exports and lower imports.For cheese, however, exports accounted for only 20 percent of previous cheese production.A 2% drop in milk production and reduced domestic demand led to a decline in dairy herds.In terms of prices, the most significant impacts on EU producer prices ranged from a 32 per cent drop in butter to a 15 per cent drop in pork.Finally, lower dairy herds and pork production may also stimulate a 4 Mt CO2eq., 1.2% reduction in total agricultural GHG emissions from baseline.The second scenario looks at the impact of China becoming self-sufficient in meat and dairy products by 2031.China is now the world’s largest producer of pork and mutton, the second largest producer of poultry and the fourth largest producer of beef.Pork is the most consumed, followed by poultry, beef and lamb.Although most of China’s meat comes from domestic sources, it remains the world’s largest importer of pork and lamb and the second-largest importer of beef and poultry.In terms of projections, meat consumption in China is expected to increase by nearly 11m tonnes over the next decade.The Chinese dairy market is much smaller than the meat market, as Chinese consumers are only gradually discovering new dairy products due to historically high levels of lactose intolerance affecting their choice of products.Whole milk powder (WMP) is the most consumed and produced.China relies far more on dairy imports than meat.For example, it relies on imports to meet about a third of its domestic consumption of cheese and whole milk powder.Dairy consumption is expected to increase slightly by about 200,000 tonnes.In this case, the markets most affected are those in which China imports the largest share of the world market.This has been the case with whey powder, whole milk powder, lamb, beef, pork, skimmed milk powder and butter, which has led to a sharp fall in world market prices and much lower export demand.Lower demand for meat and dairy exports from the EU has led to lower prices for producers, particularly pork and whey powder.The decline in Chinese import demand led to a decline in EU exports, particularly of EU pork (-256,000 tonnes).As a result, eu pork production will fall by 138,000 tonnes and consumption will increase by 108,000 tonnes as a result of lower prices.As for dairy products, exports and production also fell as China’s demand for imports fell.Other dairy exporters, such as New Zealand, have also been badly affected.Additional export supplies lead to more competition, lower prices and production, and higher consumption.As for whey, a by-product of cheese production, the loss of whey exports to China has led to a sharp fall in prices, leading to a sharp increase in whey powder consumption in the EU food industry.This article is reproduced with authorization from the Eu landmark products