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AHDB European Market Survey


18 April 2012

AHDB European Market Survey - 13 April 2012AHDB European Market Survey - 13 April 2012

The EU Commission has published data from censuses taken in November and December. The results show that overall cattle numbers declined in most of the major beef producing countries.

AHDB

Declining EU cattle numbers

The EU Commission has published data from censuses taken in November and December. The results show that overall cattle numbers declined in most of the major beef producing countries. In France, the top EU beef producer, the census reported a three per cent fall in the overall number of cattle on farm. Dairy cow numbers were down one per cent while beef cow numbers declined almost two per cent compared to a year earlier. Heifer replacements were seven per cent lower, suggesting a further decline in cow numbers can be expected in 2013. The drought conditions during 2011 and subsequent lack of fodder resulted in an increase in liquidations in cow herds. During 2011, cow slaughterings in France were up eight per cent while heifer slaughterings were up two per cent.

The trend since 2008 towards fewer cattle in Germany continued in 2011, with total numbers down one per cent on the year. However, dairy cow numbers were little changed, a reflection of the improved milk prices since June 2010, resulting in a sharp expansion in milk production and hence greater retention of dairy cows. Beef cow numbers were back three per cent. The number of heifers aged over one year was down three per cent, which suggests a continued easing back in heifer replacement demand for breeding purposes.

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In the UK, the total number of cattle fell two per cent. There was a near three per cent decline in the dairy breeding herd and a one per cent decline in the beef breeding herd. This decline was driven by much higher culling rates in 2011 as a result of the record prices on offer for cull cows, due to the shortage of manufacturing beef globally. The short term outlook remains bleak for any rebuilding of the herds, with the number of females between one and two years old down two per cent for beef and up only one per cent for dairy.

Following the trend, cattle numbers in Spain were three per cent lower on the year. Both beef and dairy cow numbers were well down as producers culled their herds; cow slaughterings in 2011 were up nine per cent compared with 2010. Mirroring the situation in many Member States, profitability was under pressure given high feed costs. The number of heifers for breeding was down by as much as 22 per cent, suggesting a further decline in cow numbers can be expected.

In contrast to the other major beef producing countries the numbers of cattle in Italy and Ireland both increased on the year. In Ireland the number of dairy cows recorded a three per cent increase, reflecting the profitability of the dairy sector. However, in the face of the expanding dairy sector, the beef herd contracted by one per cent. In Italy, there was a notable increase in beef cow numbers.

The results of the recent European forecast working group for beef suggest that production in the EU-15 region is likely to decline by two per cent in 2012, largely attributable to lower output in France, the UK and Ireland. Production in France is forecast to decline three per cent. Assuming better grazing conditions this year, female beef production is forecast to decline by five per cent in 2012 according to the Institut de l’Elevage, after an estimated increase of six per cent in 2011. In the UK, as cow slaughtering return to a more normal level, production is expected to fall four per cent. A six per cent fall is anticipated in Irish beef production in 2012.

Contrasting trends in Italian beef and pork imports

Italian beef and veal imports were down six per cent in 2011 as consumer demand for beef remained weak, with cutbacks in consumer spending. Despite the overall fall, imports from the largest supplying nation, France, were up three per cent. This was largely due to France exporting surplus young bull beef at competitive prices given higher production in 2011. Italian young bull beef production was down eight per cent on the year in 2011, which contributed to higher cattle and beef prices and falling consumption. Beef imports from non-EU countries were also down three per cent on the year, despite a four per cent rise in shipments from Brazil. The unit prices of imports in euro terms was up eight per cent on the year.

Exports of Italian beef and veal were up one per cent on 2010 levels to 135,000 tonnes, largely the result of a near doubling of trade with the Netherlands, as trade with the largest markets of France and Germany declined.

Total live cattle imports were down two per cent to 1.3 million head in 2011, despite a two per cent increase in imports from France, which accounted for 73 per cent of the total. High feed costs have affected demand for imported store cattle from feedlots, after having grown strongly in 2010.

Imports of fresh and frozen pork were one per cent higher in 2011 than in 2010. Shipments from Germany and Spain were up eight per cent and four per cent, respectively. In contrast, imports from the Netherlands and France were down seven per cent and 10 per cent respectively. The average unit price of all pork imports was up four per cent to €1,893 per tonne. Imports of fresh and chilled legs for curing into hams were up three per cent on the year to 613,000 tonnes.

Live pig imports in 2011 were up 17 per cent to 1.1 million head. The increase was mainly due to a 44 per cent rise in shipments from Denmark. Weaners represented more than two-thirds of the total , with numbers up 22 per cent. Slaughter pig imports were up four per cent on the year.

Total Italian pig meat production was down four per cent in 2011 on the previous year and this contributed to a one per cent fall in household purchases of pig meat. In January to November 2011 household fresh pork purchases were down one per cent year on year but purchases of more expensive processed products, including salami, increased two per cent.

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