The negative impacts of Russia’s invasion of Ukraine, and the ensuing high input costs and food inflation, continue to weigh on agricultural markets and consumers’ purchasing decisions. In addition, large parts of the EU experienced winter droughts after the hot and dry summer of last year, further worsening water availability in regions with already record low water reservoirs. This might lead impacted farmers to substitute away from more water-intensive crop cultures. The current EU macroeconomic forecast is relatively more positive than in autumn 2022, despite uncertainties about the energy supply for next winter and recent financial market tensions. High commodity prices last year helped counter high input costs, and farm income increased on average, with significant sectorial and regional disparities.
The latest short-term outlook report shows that lowering energy inflation could bring some relief regarding input prices. Fertilizers, especially nitrogen-based ones, could become more available and affordable compared with 2022.
Almost half of the production of apples is expected to be channeled to processing. This is a result of the higher availability of lower-quality apples not suitable for fresh consumption, their low prices, lower export opportunities, and high energy costs for storage. Consumption of fresh apples could go down (but less than in some other types of fruit) while the consumption of processed apples will increase thanks to the higher availability of products and consumer decisions to buy processed products instead of fresh ones, of a higher price.
The EU production of apples is expected to be around 12.2 million t in 2022/23 (a volume similar to the last marketing year, 2.6% above the 5-year average). A record high harvest in PL (4.2 million t, +5% year-on-year) and high crops in IT (+7%) compensated for the lower-than-usual harvesting in FR (-10%). Lower production was also observed in other EU countries, mainly HU, RO, ES, and PT.
Almost half of the production is expected to be channeled to processing rather than to be stored. This is a result of the higher availability of lower-quality apples not suitable for fresh consumption, their low prices, lower export opportunities, and high energy (storage) costs. In addition, problems with the availability of seasonal workers in some EU countries delayed harvests.
As a result of dry and hot weather conditions in the main EU-producing countries (especially in ES and IT), 2022/23 EU orange production is expected to decline by 13% to around 5.7 million t. A comparably low production was last time recorded in 2012/13. In the case of ES (more than 50% of EU production), the drop of 16% is attributed to lower yields while the area remained relatively stable. In IT, the area decline was combined with lower yields, so the production was 20% below last year. In the EU, the area decline was slightly lower (-5%) than the yield change (-8%).
Besides lower yields of oranges, the quality of the fruit is also reported to be lower.
Click here to read the report on the Short-Term Outlook for EU agricultural markets in 2023.
Click here to read the report on the Short-Term Outlook for specialized crops.