September 16, 2010

EU beef imports to remain low in 2010-11

A weak euro, slow domestic demand due to the poor economic conditions, low supplies and strong prices from South America are all factors contributing to the low EU beef imports during 2010-11 (at 0.49 million tonnes cwt).

Given the low imports and slightly lower domestic beef production (down 0.3% to 7.85 million tonnes cwt), total EU beef consumption in 2011 is expected to decrease 0.2% to 8.18 million tonnes cwt. Budget concerned consumers have reportedly shifted to lower priced minced beef and broiler meat.

Production in the EU is expected to continue to decline, following the long term contraction of the EU cattle herd as a result of higher land values, feed and energy costs and decreasing government support.

However, the beef herd has increased slightly, supported by high beef prices, while the dairy herd has declined, as low milk prices limit the viability of the segment.

Throughout the EU, smaller sized farms are exiting the industry, while expansion has been noted in larger and efficient farms.

Although total beef production in 2010 is expected to decrease 0.4% to 7.87 million tonnes cwt, high slaughter during the first half of the year has supported a seasonal rise in production. This, combined with a weak euro and dear South American beef prices have influenced a rise in exports (mainly to the Russian market) during the period.