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AHDB European Market Survey


01 February 2012

AHDB  European Market Survey - 27 January 2012AHDB European Market Survey - 27 January 2012

After several years of intense cow culling, the Brazilian beef industry is still facing lower availability of cattle for slaughter.

AHDB

Brazilian beef exports decline

According to the Brazilian Institute of Geography and Statistics (IBGE), cattle slaughterings in the year to September were almost three per cent down on 2010 at 21.5 million head. Production fell by five per cent year on year to five million tonnes indicating a marked fall in carcase weights.

Increased domestic demand and hence firm beef prices, plus a strong real, put pressure on export levels in 2011. Exports of fresh and frozen beef declined 14 per cent year on year. Russia remained the most important destination for Brazilian beef, accounting for almost 30 per cent of exports. However, shipments to Russia declined 19 per cent as Russia’s Federal Veterinary and Phytosanitary Surveillance Survey (VPSS) announced a temporary ban on imports of animal products from three Brazilian states in early June, citing sanitary concerns. Consequently, shipments to Russia in the second half of the year were 42 per cent lower than in the corresponding period in 2010.

Of the other major markets, shipments to Iran were down 30 per cent and to Egypt 14 per cent. In contrast, whilst still low in a historical context, shipments to the EU increased by nine per cent, largely as a result of increased trade with Italy, the Netherlands and Germany. Together these three Member States accounted for 80 per cent of Brazilian imports into the EU.

Exports of processed product also declined, with volumes down 17 per cent on the year to 103,000 tonnes. The most significant fall in trade was with the UK which received shipments 21 per cent lower than last year at 33,200 tonnes. Shipments to the US were down nine per cent to 12,300 tonnes.

The increasing size of the Brazilian middle class in recent years has resulted in a rise in protein consumption, resulting in higher beef prices on the domestic market. As a result, there has been an growing demand for higher quality imported beef, mainly among steakhouse chains in the Sao Paulo region. In 2011, imports increased 17 per cent on the year to 28,200 tonnes. Shipments from Uruguay and Paraguay increased 30 and 13 per cent respectively and, while only a small volume, imports from Australia increased five- fold. As expected, shipments from Argentina declined; the share of Brazilian imports sourced from Argentina fell from one third in 2010 to a quarter this year.

EU Commission seeks to improve animal welfare

The EU Commission last week adopted a new four year strategy that aims to improve the welfare of animals in the European Union. In a Communication, the Commission indicated the need to address the issue because of difficulties in agreeing on unitary rules and in ensuring their correct implementation. These difficulties have arisen partly because of the diversity of farming systems, climatic conditions and land types in different Member States. The net result is that animal welfare standards have varied significantly across Member States.

The Communication identifies several main drivers affecting the welfare of animals in the Union, including the lack of enforcement of current EU legislation by Member States and a lack of appropriate information on aspects of animal welfare to consumers.

Taking these issues and concerns into account, the Commission’s strategy is based on two complementary approaches. The first aims to tackle problems with existing legislation and its enforcement. In the past, the EU has adopted legislation to address specific issues. However, the establishment of general principles in a consolidated EU legislative framework might simplify the regulations governing animal welfare and facilitate its enforcement.

Subject to an impact assessment, the Commission will consider the need to revise the existing EU legislative framework based on a holistic approach. In particular, the Commission will consider introducing sciencebased animal welfare indicators as a way of simplifying the legal framework while allowing the flexibility to improve competitiveness of livestock producers. The simplified legislative framework is also likely to include common requirements on issues such as the handling of animals.

The second approach is to reinforce or better use actions that the Commission already performs. The Commission has therefore proposed measures such as: developing tools to strengthen compliance with legal requirements; improving international cooperation on animal welfare issues; providing consumers with better information; and performing studies where animal welfare appears to encounter the most problems.

The strategy will gradually come into effect from 2012 to 2015. Over the next year, key actions will include developing an implementation plan and enforcement actions on the grouping of sows and work on rules or guidelines on the protection of animals during transport.

A copy of the Communication is available by clicking here.

January 2012

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