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EU Cattle Prices Strong as Output Declines

22 July 2012

BordBia

European cattle prices have increased strongly to date in 2012 with prices more than 12 per cent higher at 381c/kg, according to Peter Duggan from the Strategic Information Services at Bord Bia-Irish Food Board.

Irish cattle prices have continued the trend evident in 2011, and to date in 2012 have been three per cent above the EU-15 weighted average price at 394c/kg.

Prices were particularly strong in May and June when they were more than five per cent above the EU-15 average at 400c/kg.

There are a number of factors boosting European cattle prices, including:

Lower EU Output

For the first four months of 2012, beef output in the EU-15 region was back by four per cent to 2.28 million tonnes.

Most of this fall is attributable to a slowdown in output across Italy, France, Ireland, Poland, the UK and the Netherlands.

This slowdown in production showed no signs of easing for the month of May in the UK and France.

A further contraction in French supplies was evident, with output 10 per cent lower in May at 128,100 tonnes while UK output was six per cent lower relative to 2011.

Significant EU exports

During 2011, the EU beef trade, including live exports, was helped by strong international demand with exports reaching 635,000 tonnes.

However due to tightening supplies and higher tariff rates in Turkey, exports have eased by around 28 per cent to 156,600 tonnes for the first four months of 2012.

If exports tracked this trend for the remainder of the year, exports would still reach a significant 468,000 tonnes, which is 46 per cent above the average exports recorded during the 2005 – 2010 period.

Lower EU imports

Meanwhile, imports of beef, including live animals, into the EU continue to fall, with imports back by eight per cent for the first four months of 2012.

Most of the fall centres on lower exports from Brazil, Argentina and Uruguay reflecting some rise in domestic consumption and the emergence of new market opportunities in the Middle East and North Africa.

One factor though that is offsetting these developments is lower beef consumption. From the latest EU beef working forecasting meeting, consumption is forecast to fall by over one per cent to 7.26 million tonnes in the EU-15 during 2012.

This fall in consumption is supported by the latest trends in France and the GB which show consumption back by over one per cent to date this year in France and almost 5 per cent lower in the 12 week period ending the 10th June in Great Britain.

July 2012

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