Stranded assets in European agriculture during food system transformations

Overview

Quantitative assessment of stranded-asset exposure in EU27 + UK agriculture under projected dietary shifts away from animal-sourced foods (ASF). The analysis links agricultural capital stock and sectoral economic flows to a global multi-regional input–output framework to spatially and sectorally allocate fixed assets associated with ASF production, including livestock and feed sectors. Key headline estimates show that ASF-related assets constitute the majority of fixed agricultural capital in the study region, and that plausible consumption-reduction scenarios can render a large fraction of these assets economically obsolete before the end of their service lives.

Methods and approach

Integration of national agricultural asset registers and sectoral production data with a global multi-regional input–output (MRIO) model to attribute fixed capital to supply-chain nodes associated with ASF. Capital stocks were disaggregated into livestock, feed, and crop components and linked to consumption scenarios for EU27 + UK with counterfactual reductions in ASF demand. Stranding estimates combine projected demand reductions with current fixed-asset valuations and assumed linear or sector-specific depreciation schedules to calculate the proportion and nominal value of assets exposed to early retirement. Sensitivity analyses explore alternative depreciation rates and indirect upstream exposure via feed and input suppliers.

Results

ASF-related fixed agricultural assets represent 78% of total fixed agricultural capital in the EU27 + UK. Monetary allocation identifies approximately €158 billion of assets directly associated with livestock production and €100 billion linked to feed production. Under consumption-reduction scenarios of 9.5%, 60%, and 100% reductions in ASF intake, estimated stranded-asset proportions are 18%, 50%, and 77% of ASF-related assets, respectively. Current depreciation trajectories imply that, in most cases, asset lifetimes provide temporal scope for managed phase-out or repurposing rather than immediate write-offs, though heterogeneity across asset types and regions produces concentrated near-term exposure in specific producer groups and supply-chain nodes.

Implications

Financial and transition-risk modelling should treat dietary-change-induced stranding as a distinct but overlapping pressure with climate-policy stranding; both mechanisms can compound capital devaluation in agricultural value chains and should be incorporated jointly in stress tests and portfolio assessments. Given high exposure among primary food producers and upstream feed suppliers, policy instruments that enable asset repurposing, targeted financial support for orderly decommissioning, and coordinated supply-chain adaptation reduce the risk of abrupt dislocations. Market and regulatory strategies that align depreciation timelines, investment incentives, and retraining or capital-redeployment pathways will be necessary to limit socio-economic fallout during food-system transformation.