European Union beef production is expected to fall to its
lowest since the 1960s, as high grain prices stoke a long-term decline in
output blamed on changes to subsidies and a reduced dairy herd.
The bloc, the world's third-largest beef producer after the
US and Brazil, will see output fall to 7.76m tonnes in 2013, the European Commission
said on Monday.
While representing a lower rate of decline than that seen
this year, the drop will be enough to leave production at its lowest for 46
years, according to data kept by the US Department of Agriculture.
The USDA's own offices in Europe have pegged EU production
at 7.70m tonnes next year.
The European Commission flagged a "long-lasting reduction in
the EU cattle herd, and thus reduced slaughterings" behind the decline in
output, adding that this meant "beef prices are expected to stay firm".
The decline reflects in part the diminishing dairy herd, thanks
to an increasing improvement in productivity which is allowing farms to produce
more milk with fewer cows.
Indeed, EU milk output will rise by 1.1% to 154.8m tonnes
next year despite a drop of some 200,000 cows to 22.5m head.
However, increased costs and reduced subsidies have also cut
numbers of beef cattle too.
"The herd contracts as a result of increasing input costs
such as feed, energy and credits, and phasing out of government support," the
USDA bureau said.
Reforms to farm subsidies have phased out supports such as
per-head subsidies and slaughter premiums.
"In Germany and Italy, competition for acreage with corn for
biogas production is also negatively impacting the herd," a factor which, in
the face of increasing criticism over energy crops at times of high food
prices, is prompting groups such as KTG Energie to promote use of follow-on
crops such as millet.
The high prices encouraged by the EU's dwindling production
are only encouraging consumers to swap beef for cheaper meats, notably poultry,
which the commission said "is expected to remain the only species in which
production is expected to keep growing.
"Poultry meat becomes more attractive under periods of economic
slowdown because of its price competitiveness," the commission said.
EU pork production will tumble 3.2% in 2013, with the costs
of upgraded animal welfare rules from January expected to encourage some farmers
to sell-up, and higher grain prices curtailing output among remaining