Positive predictions for EU meat sector despite Russian impact

Its biannual Foreign Agricultural Service’s (FAS) Global Agricultural Information Network (GAIN) report into livestock and products in the EU 28 suggested that production and export levels would remain steady. However the benefits of low feed prices would be balanced against record low prices, and tight or negative margins, it said.

EU exports are also expected to expand in 2015, due to the favourable exchange rate of the Euro, forecast the report. Increased exports of pork to Asia and Africa is forecast, while tight global beef supply has restricted EU imports, but has inspired exporters to find alternative markets to Russia.

The expansion of the dairy herd is expected to push calf crop, slaughter and beef production levels higher this year. Dairy-herd growth is expected to take place predominantly in Northern Europe, the expansion of the EU beef herd has seen the largest growth in Spain and France. However according to a December census, statistics from 24 Member States noted growth in the beef herd had been seen last year.

Last year saw higher than anticipated cattle exports to Lebanon and Russia, with expansion forecast for exports of breeding cattle to Russia and exports of both breeding cattle and animals for halal slaughter to Turkey, said the report.

Beef production at official slaughterhouses increased by 0.23% during the first 11 months of 2014, with growth expected this year. Increased production levels have been reported in Poland, Ireland, Germany and the United Kingdom.

Lower levels of imports have been seen from key South American suppliers Brazil, Uruguay and Argentina, while EU exports look set to increase this year despite the Russian ban. New markets were found for beef from the EU, with Hong Kong increasing its intake from the UK and Ireland, for example.

Slaughter numbers for swine was also up (+0.3%) for the first 11 months of 2014, however growth of the EU herd was reported, predominantly in Spain, Denmark and Poland.

The report forecasts that the 2015 pig crop will increase above the production level of last year, in part due to increased efficiency. While predictions are based on the Russian market being closed to EU swine for the full year, the report estimates that exports to the alternative destinations found will increase. Pork exports rose most notably to South Korea and Japan, while Spain increased its exports to third country destinations. The reports estimates that EU exports to the Asian and African markets will continue to increase this year.

EU pork production is forecast to increase slightly on the 2014 estimate (2.4MMT) to nearly 22.5MMT in 2015, due to the expected increase in piglet production and slaughter.