Beef prices will hit "a high level" in Europe this year, thanks to squeeze prompted by curbs on imports from South American, and a fall in home-grown supplies to their lowest for at least five years.
The European Union's own beef production will fall by 50,000 tonnes to 7.92m tonnes, the lowest since at least 2005, a joint report from the US Department of Agriculture's European bureaux said.
|
EU beef dynamics, 2010 (year-on-year change)
Animal slaughter: 28.45m head (-250,000 head)
Beef production: 7.92m tonnes (-50,000 tonnes)
Imports: 500,000 tonnes (+5,000 tonnes)
Extra-EU exports: 150,000 tonnes (+2,000 tonnes)
Domestic use: 8.27m tonnes (-47,000 tonnes)
Source: USDA attache report |
The drop reflects the continuing decline in the region's cattle herd, which will end 2010 at 88m head, down some 10m animals over the last decade. Calf production will fall 0.8% this year.
Meanwhile, imports will struggle to make up the shortfall, with merchants viewing imports from Brazil as likely to remain "constrained" by sanitary restrictions.
The European Union, which two years ago stopped Brazilian beef imports citing "unacceptable" foot-and-mouth controls, "remains critical" of the country's animal tracing regime, the briefing said.
And imports Argentina will remain "limited" by a shortage of cattle in the South American country, which was forced by drought to liquidate much of its herd last year, and has imposed export restrictions to ensure domestic supplies.
'Tightened supply'
"The falling [EU] beef production, together with the restricted imports, will tighten the supply of beef on the domestic market further in 2010," the report said.
"As a result, consumer prices are forecast to remain on a high level."
The robust prices would foster a marginal decline in Europeans' beef consumption, shifting demand to cheaper products such as mince and poultry, and keep exports at 150,000 tonnes, down from 253,000 tonnes five years before.
Small farms quit
The long-term decline in Europe's cattle herd has been stoked largely by the soft milk prices and restricted levels of state support, with higher grain prices also contributing in recent years.
"Throughout the EU, the smaller farms with only a few cows are abandoning the sector, while the biggest and most efficient farms are expanding," the briefing said.
The decline has been particularly apparent in the dairy herd which, due to the "plummeting" milk market, shrank by 1.8% to 23.8m animals last year.
The number of beef cows slipped by 0.4% to 12.2m head.
PRINTABLE VERSION
EMAIL TO A FRIEND
RSS FEEDS