Asset risk in European agriculture during food shifts

This study examines how shifts in diets away from animal-sourced foods in high-income countries could leave large shares of agricultural capital unused. The authors link agricultural and economic data to multi-regional input–output models and find that animal-sourced food (ASF) assets make up 78% of fixed agricultural assets in the EU27 + UK, including €158 billion tied to livestock and €100 billion tied to feed production. Projected reductions in ASF consumption of 9.5%, 60% and 100% correspond to 18%, 50% and 77% of these assets becoming stranded, respectively. Current depreciation rates imply that there may be enough time to phase out assets, and the paper notes that policy-driven and climate-driven risks interact and should be considered together. The authors argue that coordinated support to repurpose or retire ASF-related assets is important to prevent delays during transitions.

What the study examined

This work looks at the financial exposure of European agriculture to shifts in food consumption, focusing on reduced demand for animal-sourced foods in higher-income contexts. It connects agricultural inventories and economic data with global multi-regional input–output models to estimate how assets tied to animal-sourced food production sit within the broader agricultural capital stock of the EU27 + UK.

Key findings

• Assets associated with animal-sourced food production account for 78% of fixed agricultural assets in the EU27 + UK.

• Monetary totals identified include €158 billion associated with livestock and €100 billion associated with feed production.

• Scenarios of reduced animal-sourced food consumption correspond to substantial shares of those assets becoming unused: a 9.5% reduction maps to 18% of such assets, a 60% reduction maps to 50%, and a complete 100% reduction maps to 77%.

• Observed depreciation rates for agricultural capital suggest there is generally time available to phase assets out rather than incurring immediate write-downs.

• The study highlights that risks from policy shifts and risks from climate change interact, creating overlapping pressures on asset values along supply chains.

Why it matters

High exposure of producers and suppliers to changes in demand for animal-sourced foods means financial and operational effects can cascade through supply chains. The identified scale of at-risk capital—both in percentage terms and in euro amounts—shows the magnitude of potential adjustment facing the sector.

The finding that depreciation timelines offer a window for adjustment points to possible pathways that could reduce abrupt losses. At the same time, the paper stresses that policy decisions and climate impacts can compound each other as drivers of asset non-use, which has implications for financial modelling and planning across food systems.

By quantifying where assets are concentrated and how different consumption scenarios map to asset exposure, the analysis provides a basis for coordinated responses aimed at repurposing, phasing out, or otherwise managing assets tied to animal-sourced food production so that transitions in the food system proceed without unnecessary delays.