Agricultural Production and Trade in the European Union

The European Union (EU) is a major agricultural producer. From fruits to dairy products, the wide variety of climates within the member states of Union allows for a diverse production and fosters continental trade. This article explores some the EU’s main agricultural products as well as ongoing commercial dynamics.

Agricultural Production and Trade in the European Union

One of the main permanent crops cultivated in the European Union is cherries. The main producers of cherries within the EU member states are Poland, Spain, and Italy, followed by Greece, Hungary, and Germany. Yielding over 220,000 metric tons for several consecutive years, Poland easily doubles the cherry output of the (second) closest producer. Most of the forecast 2016/17 production in Poland is expected to consist of sour cherries at 185,000 metric tons, while another 50,000 metric tons should be sweet cherries. Sour cherries tend be used in the confection of cherry products through manufacturing and processing, whereas, sweet cherries are consumed fresh.

While cherry production in Poland has increased consistently over the last several years, aided in part by the mild winters in the country, every other major producing nation has either decreased or remained stagnant in its output. When it comes to consumption, the main European market for fresh sweet cherries is Italy, whereas Poland is the largest processor and manufacturer of sour cherry products. Even though the EU is usually a net exporter of cherries, decreased output over the last few years has led to a near-zero trade balance as well as some imports from Turkey, the world’s largest cherry producer.

Fresh Peaches and Nectarines

Other valuable permanent crops harvested in southern Europe are peaches and nectarines. Traditionally, the main producers of these two goods have been Spain, Italy, Greece, and France representing most of the 232,000 hectares of these permanent crops throughout the EU. Spain and Italy alone, the two largest European producers, account for 158,000 hectares of peach and nectarine production. The third European producer of these agricultural goods is Greece; however, Greek farms tend to average five hectares in size, which represents even more atomized operations than the industry’s average throughout the rest of the EU or even North America.

Similar to other agricultural goods, the production of peaches and nectarines within the EU is projected to decrease for the 2016/17 harvest due to unfavourable weather conditions in southern Europe. Nevertheless, the EU remains a net exporter of peaches and nectarines; in 2015/16, the exports of these two agricultural products equated to US$197 million. Furthermore, this substantial trade surplus was maintained in spite of the sanctions prohibiting agricultural exports to the Russian market. The EU agricultural exporters were successful in reorienting their sales and creating new markets for their produce in non-EU eastern European nations as well as North African and Asian countries.

In this regard, between 2014/15 and 2015/16 peaches and nectarines export from the EU into Belarus increased 123%. Meanwhile, exports to Russia decreased 99% due to the commercial sanctions. It is likely that Belarus has become the intermediary in between the EU and Russian markets, thus explaining the surge in agricultural imports.

(Read more about how Brexit Creates Uncertainty and Opportunity in Agribusiness)