March 5, 2013

 

 

The EU's meat production is significantly affected by tight cattle and pig supplies, thus making the region a net beef importer and limiting pork export opportunities.

 

The USDA has cut its estimate for this year's EU pork exports by 145,000 tonnes, cautioning that the impact of more stringent pig husbandry standards on the industry had been greater than previously thought, causing a "crisis" in Poland.

 

"EU pork exports are forecast to stagnate as a result of the lower domestic supply," the USDA staff said in a report, while noting the potential for shipments caused by clampdowns by China and Russia on supplies from the likes of the US, on grounds of usage of the ractopamine to promote meat leanness.

 

"In 2013, opportunities for export remain as more plants are eligible to export directly to China, and Russia has imposed bans on pork from the US, Canada and Brazil."

 

The EU returned to being a net importer of beef last year, and is likely to remain so in 2013, due to the impact of tight supplies reducing overall cattle slaughter. The forecast has fallen to 27.2 million heads this year - the lowest on records going back to 1960.

 

"The lower slaughter is mainly a result of the scarcity of animals," the USDA staff said, acknowledging that they had previously "underestimated" the impact of the herd decline.

 

The estimate for EU stocks of beef cows was downgraded by 65,000 head below 12.0 million animals.

 

"The EU cattle herd is shrinking due to the phasing out of government support programmes. The herd has further been reduced by the surge in exports of cattle and beef to Turkey in 2011."

 

The squeeze on cattle supplies - evident in record steer and cow carcass prices, as measured in the Netherlands – will leave the EU an importer of some 50,000 tonnes of beef in 2013.

 

However, the report also highlighted some pressure within the EU towards rebuilding cattle herds, notably in Ireland, where dairy farmers are preparing to ramp up output after the lifting of milk production quotas.

 

"The Irish dairy and beef sector is optimistic due to higher dairy and meat prices and anticipated opportunities from the liberalisation of the dairy sector.

 

"The dairy sector has seen a large increase in cattle under one year and between one to two years old, as well as reduced slaughter."