March 5, 2012

Despite a decline in exports of both meat and live animals, an EU Commission's forecast has expected EU cattle prices to remain high in 2012, due largely to limited supplies and increased competition.

EU beef and veal production is forecast at 7.915 million tonnes for 2012, back 4% from 8.222 million tonnes in 2011. After a strong year for beef and veal exports in 2011, particularly to Russia and Turkey, EU beef and veal shipments are predicted to contract 29% in 2012, to 235,000 tonnes.

In contrast, EU beef imports are forecast to recover somewhat in 2012, as tight domestic supply and a gradual recovery in availability of supply from traditional suppliers helps to rejuvenate import volumes. However, while imports are forecast to increase 10%, or 30,000 tonnes in 2012, overall beef consumption is still predicted to fall another 2%.

Like many other markets, EU cattle prices reached record highs in 2011. Tight global supplies of beef in 2011 led to falling imports into the EU, while at the same time, the very weak EU currency assisted exports, forcing domestic cattle prices higher.