November 7, 2022
Cattle prices in the EU on the rise because of lower output
Deadweight cattle prices in the European Union have increased since late-2021 because of declining output year-on-year, with the largest production declines in Germany and France, the UK Agriculture and Horticulture Development Board reported.
The EU Commission is projecting that beef production in the region will stay below 2021 levels for the remainder of the year before stabilising at this lower level through 2023. If demand remains at current levels, this will probably provide some support for cattle prices for the foreseeable future.
Through 2020 and 2021, UK prices had been higher than those on the continent, with price support coming in part from a shortage of cattle and increased retail demand brought on by the pandemic. Prices have recently softened, in part as a result of changes in exchange rates, and have since returned to tracking the higher end of EU prices.
Exports of UK beef have increased significantly year-on-year. Although the removal of COVID-19 restrictions and the return to regular trading patterns following Brexit will contribute to some of this growth, the EU will be the UK's largest trading partner, which will result in more competitive pricing.
The prices of EU cull cows have been rising in line with those of prime cattle. The EU average deadweight O3 cow price increased 27% from the same time last year to EUR 4.30/kg (~US$4.30; EUR 1 = US$1) in the week ending October 10.
The tighter cattle supply and ongoing demand for beef after COVID-19, particularly for manufacturing, is driving these higher prices. Due to pressures like profitability and environmental goals, breeding cow populations have been declining in several EU member states, including France and the Netherlands. The region's production has also been impacted by the recent drought.
Due to forage shortages and high feed prices, the EU Commission expects to see more cattle slaughtered toward the end of the year.
- UK Agriculture and Horticulture Development Board