EU Beef Production to Fall 6% By 2014

UK - The latest EU Commission forecasts for the beef sector indicate that EU-27 beef production will fall six per cent to 7.6 million tonnes between 2007 and 2014.

14 April 2008

2 minute read

Europe

According to a Livestock and Meat Commission (LMC) bulletin, beef consumption is expected to decrease by three per cent over the same period, which should lead to beef imports growing by 27 per cent to almost 750,000 tonnes in 2014.

This analysis was conducted with the information available at the end of 2007 and therefore the impact of the current EU ban on imports of Brazilian beef was not considered.

Beef production falling

EU-27 beef and veal production is reported to have fallen slightly in 2007 due to declining cattle numbers and rising feed costs. Production in 2007 totalled eight million tonnes, but by 2014 it is forecast to fall by 438,000 tonnes (six per cent) to 7.6 million tonnes.

A number of factors will influence the beef market situation in the short and medium term, including higher milk prices, the evolution of feed prices and the impact of animal diseases across the EU. The outbreak of Bluetongue in a number of northern and central EU countries could potentially affect production, for example through a ban on live trade, increased mortality, reduced fertility, or lower milk production. The December 2007 decision to restrict Brazilian beef imports and the subsequent ban at the end of January 2008 will also affect future market developments. The overall impact will depend on the extent of the restrictions on Brazil.

Gradual decline in EU dairy herd

The major factors influencing the medium to longer term projections for the beef sector are the gradual decrease in the EU dairy herd (the origin for two thirds of EU beef) and the continued impact of decoupling. These factors combined with rising cereal prices are forecast to reduce the incentives for intensive beef production systems. They will also reduce production from unprofitable production and hence overall output.

Market developments in the EU-12 countries will have a moderate impact on these projections as these member states produce only 10 per cent of EU beef and consume just nine per cent of output. Beef production in these member states is almost entirely out of the dairy herd and while there has been a small increase in the number of beef cows in these countries in recent years, they still only account for a small percentage of the total beef cow herd.

The graph above shows rising EU beef imports and falling EU beef production and consumption. Please note that the consumption and production lines are based on the left hand axis, with the net imports line based on the right hand axis.