Bord Bia
Meat & Livestock
Market Outlook
Autumn 2014
Growing the success of Irish food & horticulture
Bord Bia Meat & Livestock Market Outlook
Market Review
& Outlook for
Irish Beef
Difficulties within the EU
Beef Market
To-date in 2014, the beef market has been very
challenging. Prices paid for R3 steers by Irish meat
plants have fallen by more than 10% in comparison
with the same period last year.
This decline is a reflection of weaker market demand,
combined with a recovery in beef supplies throughout
Europe. Across each of the major beef producing
countries, cattle prices have deteriorated relative to
2013 levels.
In the UK, prices fell sharply from the beginning of the
year until recent months, when they have recovered
somewhat. While the UK remains the highest priced
beef market in the EU, cattle prices there continue to
lag 5.5% behind this time last year.
Continental European cattle prices have also declined
steadily during 2014 with Irish steer prices exceeding
the average Continental EU young bull price for most
of the year. However, this trend has been reversed in
recent weeks, with the Irish R3 steer price slipping to
€3.51/kg (excl. VAT), in comparison to €3.60/kg for the
Continental EU average, and €4.35/kg for R3 steers in
the UK.
Irish Cattle Supplies 12.5%
Higher but Numbers to Tighten
in 2015
Finished cattle supplies in Ireland have risen by 12.5%,
or 125,000 head, to-date, in comparison with last year.
All categories of cattle have experienced an increase
in throughput. The number of steers has been almost
19% higher, with heifers up by 16% and young bulls
10%. Cull cows slaughterings are just 1% higher.
Since average carcase weights also recovered, the
overall volume of beef produced in Ireland to-date is
estimated to have increased even more significantly,
by 15%.
Producer Price Comparison: Irish R3 steer vs. UK R3
steer & Continental European R3 Young Bull (c/kg excl.
VAT)
450
400
350
UK R3 Steers
300
Ireland R3 Steers
250
Continental European
R3 Young Bull
Jan
Feb Mar Apr May Jun
Jul
Aug Sep
2014 2014 2014 2014 2014 2014 2014 2014 2014
Source: Bord Bia
Bord Bia Meat & Livestock Market Outlook
Although cattle supplies are expected to continue to be
strong over the coming weeks, looking ahead to late
2014 and into 2015, availability of prime cattle looks
set to tighten considerably.
A recent analysis of the Department of Agriculture,
Food and the Marine’s Animal Identification and
Movement (AIM) database on the 1st of August
revealed a 35,000-head increase in the number of
males and beef-cross females aged between 24 and
36 months, compared to the same time last year.
However, the number of these animals in the 12 to
24 month age range declined by almost 100,000
head. This is principally an impact of a 4.3% decline in
calf births last year, along with a 60% increase in live
exports of calves and weanlings.
Taking the figures from AIM into account, overall
supplies at export meat plants are likely to reach 1.65m
head for the year, up from 1.5m in 2013. However, for
next year, the number of cattle available for slaughter is
forecast to decline by at least 100,000 head, as shown
in the chart below.
EU Beef Production Recovering
In recent times, beef production across Europe has
tended to decline consecutively each year. In 2013,
the overall volume produced by the EU was estimated
to have fallen by 4% to 7.4 million tonnes, which
followed another significant drop of 4.8% the
previous year.
However, this year there has been an increase in EU
beef availability, as a result of higher cattle output
in several member states, including Ireland, the UK,
Poland, the Netherlands and Germany.
Overall beef production in Europe is expected to recover
by 1.4% in 2014, and for 2015, a rise in output of
2.3% is forecast.
The growth in Europe’s beef output is partly attributable
to the steady rise in EU dairy cow numbers (to 23.5m.)
over the past 3 years, in anticipation of quota abolition.
Retention of heifers contributed to lower meat production
in 2012 and 2013 as fewer females were slaughtered.
Meanwhile however, calf births have been gradually
increasing, leading to a higher number of finished animals
available on the market in 2014 and 2015.
Beef Demand Recovering in
Ireland and UK
On the Irish market, sales of beef through retailers
have been performing very well this year, with volumes
for the 12-week period to the 20th of July running
7.7% ahead of the same period in 2013. The increase
may be due in part to economic recovery, and to
warm, dry weather which lent itself well to barbeques.
However, the recovery in domestic demand, while
welcome, has had little impact on the overall beef
trade, since more than 85% of Irish beef production is
exported, and therefore impacted by conditions in our
major export markets.
The UK market accounted for 250,000 tonnes, or
53%, of Irish beef exports in 2013. During the first
half of this year, the UK beef trade was impacted by
higher volumes on the market. Up to July, UK domestic
production increased by 2.8% while beef imports rose
by 6.2%. These factors resulted in the equivalent of
over 30,000 tonnes (carcase weight) of additional
supplies available, and these were generally met with
lacklustre demand.
Irish Finished Cattle Supply Trend 2013 – 2015(F)
1800
1600
1.49m
1.65m
1.5-1.55m
EU Beef Production Trend 2012 – 2014(E)
Steers
1600
Heifers
1400
1400
Cows
1200
1200
Y Bulls
1000
1000
Other
800
800
600
600
400
400
200
200
0
2014(E)
2012
+2.0%
2013
+0.8%
+0.2%
2015(F)
Source: DAFM
2014(e)
+2.6%
+1% +10%
+3.1%
France
Italy
Germany
0
2013
3
UK
Spain
+6%
Netherlands
Ireland
Portugal
Bord Bia Meat & Livestock Market Outlook
Over recent months, there has been a better balance
within the UK market, as cattle numbers have
tightened, and demand for beef has recovered
somewhat. The latest retail data for Britain during
the 12 weeks up to the 20th of July reveals a 3.7%
uplift in the volume of beef sold. As shown by the
following chart, higher sales of mince and steak have
driven the increase, although volumes of burgers,
roasting joints and stewing beef sold were lower than
the previous year.
environment in several key markets.
It is anticipated that prime cattle supplies will tighten
further in UK towards the year-end. The weakening in
the value of the Euro against Sterling, from £0.84p last
September to £0.795p currently, has made Irish beef
more competitive in that market.
Feedback from the Southern European markets,
most notably Italy and Spain, suggests that consumer
demand for beef continues to be impacted by difficult
economic situation.
Continental EU Markets of
Growing Importance
After the UK, Continental EU markets make up the vast
majority of Ireland’s beef exports. These destinations,
which include France, Italy, the Netherlands, Sweden,
Germany and Spain, collectively accounted for 214,000
tonnes, or 45%, of Irish beef exports in 2013.
Exports to the Continental EU markets look set to rise
significantly this year, reflecting higher Irish output
and a well-supplied UK market. The estimated 15%
increase in Irish production to-date is equivalent to the
volume of beef which Ireland exported last year into
both the French and German markets combined.
These additional supplies have posed some challenges,
in order to identify markets and customers. In addition
to higher volumes of Irish beef, production has also
increased around Europe, and consumer demand
continues to be impacted by the difficult economic
The latest figures available for retail beef sales in the
French market show a decline of 4.0% in volume sales
for the first half of this year, which coincided with an
average price increase of 1.2%.
A similar trend is evident in the German market, where
retail sales of beef up to the end of June showed a
decline of 3.1% in comparison with the equivalent
period in 2013.
In spite of these downbeat indications in the shortterm, Irish beef continues to enjoy a strong following
among customers throughout Continental Europe.
The feedback that Bord Bia continually gets from
meetings with retail and foodservice buyers is that
they place a real value on Irish beef, produced on
Sustainable, Quality Assured farms, using grass-based
production systems and dedicated beef suckler herds.
In many cases, Irish beef is sold at a price premium
over beef of other origins, and often over the domestic
offering, on account of these points of difference.
Gt. Britain – % Change in Retail Sales of Beef (Volume) 12 weeks ended 20/07/2014
6
4
% Change in Volume
4
+5.0
+5.0
+3.7
2
0
-2
Total beef
Mince
Frying/grilling
steak
-1.9
Burgers and grills
-4
-6
-4.8
Roasting joints
-5.8
Stewing beef
-8
Source: Kantar World Panel
Bord Bia Meat & Livestock Market Outlook
Bord Bia Meat & Livestock Market Outlook
Live Export
Outloook
Live Exports Hit their Highest
Level since 2010
Exports of live cattle from Ireland reached almost
186,000 head during the first 8 months of this year:
an increase of 19% on 2013 levels. In fact, the number
of cattle exported to-date is at its strongest level since
2010, when the highest exports of recent years were
recorded (340,000 head). Based on recent activity,
exports for 2014 could extend to 250,000 head by the
year end.
Shipments of all categories of stock have increased.
Exports of calves up to 3 months of age have risen by
14% to 101,000 head. Exports of weanlings and stores
aged between 4 and 21 months are collectively 14%
higher than last year, at 48,000 head. Meanwhile, the
number of adult or finished cattle exported has gone
up by more than 40%, at almost 37,000 head.
Exports to most of the principal markets have
experienced an uplift in comparison with last year.
Consignments of cattle to Northern Ireland have
risen by more than 8% to-date, which reflects higher
movements of dairy stock: cows and in-calf heifers.
However, the traditional trade in stores and finished
cattle has been slower, on account of limited demand
for beef coming from cattle of mixed origin. Exports
to Britain have increased by more than 50% and these
were also dominated by dairy breeding cattle, along
with some stores for further feeding.
Exports to Italy
Recovering Strongly
Irish exports to the Italian market of high quality suckler
weanlings have recovered strongly in comparison
with recent years. Most recently, weekly exports to
Italy of more than 1,400 cattle are being consistently
Distribution of Live Exports to Main
Markets up to September 1st
Live Cattle Exports for January - September
period 2010 - 2014
2013
300,000
Adult
250,000
200,000
150,000
100,000
50,000
0
2010
2011
2012
2013
2014
Source: Bord Bia and DAFM
Total
2014
% change
156,511
185,766
+19%
Weanlings & Stores
N. Ireland
27,315
29,607
+8.5%
Calves
G. Britain
6,562
10,160
+55%
Italy
16,851
22,405
+33%
Spain
34,057
42,744
+26%
Int. Markets
12,701
15,412
+21%
Netherlands
30,778
37,982
+23%
Belgium
19,337
20,933
+8%
Source: Bord Bia
5
6
Bord Bia Meat & Livestock Market Outlook
Calf exports to the Netherlands and Belgium also
performed very well earlier in the year, with numbers
shipped increasing by 23% and 8%, respectively.
recorded, which is a good indication for the upcoming
autumn weanling sales. Italian feedlot owners have
a preference for well-shaped young cattle with the
potential to put on weight quickly without laying
down fat. For most feedlots the ideal arrival weight is
between 340 and 420kg for bulls and between 300
and 380kg for heifers. Although Italian beef prices
remain below last year’s levels, finishers there are more
optimistic in restocking because lower feed prices have
greatly relieved their production costs.
Bord Bia Promoting
Irish Livestock
Live exports represent an important source of
competition alongside the processing sector, as well as
a valuable market outlet for the different categories of
stock. Bord Bia actively supports the development of
the live export trade through the provision of market
information and targeted promotional activities.
Of the 1.2 million cattle imported annually into Italy,
approximately 75% come from France. The French
have far lower transport costs than for Irish weanlings
and their purebred stock have a reputation for
consistency and uniformity. However, the high-end
animals being exported from Ireland are becoming
more popular because of their superior performance
and high health status. As shown by the graph
below, French weanling prices have remained strong
throughout the year, and this factor should also
strengthen the demand for Irish animals over the
coming months.
This year, Bord Bia conducted an advertising campaign
in relevant agri-publications across the key markets for
Irish calves and weanlings, in order to grow awareness.
Meanwhile, promotional brochures and DVD’s were
circulated to potential buyers to encourage them to
purchase from Ireland. Several new customers were
identified, who had not previously bought Irish cattle,
and these were invited to Ireland to visit exporters and
farms. In each case, this generated new business for
Irish live exports. Furthermore, a number of study
visits were carried out to North African markets,
generating valuable information and contacts for
circulation to Irish exporters.
Live exports of Irish cattle to Spain have increased by
26% to-date, reaching almost 43,000 head. Earlier
in the year, exports mostly consisted of male Friesian
calves which are fed intensively in feedlots to finish as
young bulls at 13-14 months of age. In recent months,
Spanish buyers have shown interest in Irish weanlings
again, and are expected to compete for the lighter R
grade continental bulls and heifers.
Exports to non-EU markets have also increased by 21%
on last year’s levels. These relate mainly to shipments
of young bulls for further feeding in Libya, followed by
Tunisia and Morocco.
Average Weanling Prices in Fance 2014
U grade bulls aged 6-12 mo.s, 300-400kg
3.00
Limousin
2.80
Charolais
2.60
2.40
2.20
2.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Source: Agreste
Bord Bia Meat & Livestock Market Outlook
Bord Bia Meat & Livestock Market Outlook
Medium-Term
Beef Outloook
DEMAND
Further growth in global meat
demand anticipated
The recent long term outlook produced by the OECD
suggests that global demand for meat will continue to
grow by 1.6% annually over the next decade as higher
income levels and increasing urbanisation in developing
regions boost demand for protein.
This will result in an additional 58 million tonnes
consumed in 2023 relative to the 2011 – 2013 period.
More than 80% of this growth will occur in developing
countries such as Asia, South America and Africa. The
rise will be led by poultry and sheepmeat but all species
will see double digit growth over the period.
Medium term analysis by GIRA suggests that in the
period to 2019, firm import demand from Asia, as
well as herd rebuilding in North America, support
Growth
Consumption by
Growth
ininConsumption
byMeat
Meat
stronger meat prices. They also expect poultry to
overtake pork to become the most consumed meat
product over the period.
The following pages summarise the trends anticipated
for beef across the main producing and consuming
regions around the world.
Asia to drive beef demand
Demand for beef will continue to grow in Asia with
consumption expected to rise by 8% over the next five
years. Prices for beef cuts are increasing in many parts
of Asia with muscle cuts now valued at or above EU
levels in some cases. The region offers opportunities
for EU exporters over the medium term once access is
secured while it will also play a key role in absorbing
beef from other suppliers that traditionally would have
supplied Europe.
%
of Meat
ConsumptionGrowth
Growth
%Share
of Meat
Consumption
(% Change 2023 vs. 2011-2013)
Pork
29%
30%
25%
20%
15%
10%
5%
15%
Poultry
0%
Poultry Sheepmeat
Pork
Beef
50%
Source: OECD/FAO Agricultural Outlook 2014 – 2023
Beef
6%
Sheepmeat
7
Bord Bia Meat & Livestock Market Outlook
The growing importance of this region is highlighted by
the fact that Chinese imports of beef showed a fourfold
increase in the period 2009 – 2013. Asia now accounts
for more than 35% of the global beef trade compared
to less than 25% in 2009. By 2019, the region is likely
to account for around 45% of the global beef trade.
Chinese import growth is likely to absorb much of the
rise in global output, which will help to deliver a well
balanced global market.
The United States remains the largest consumer of beef
globally and accounts for 17% of global beef imports.
US output is currently depressed after two years of
drought, which led to high cow culling in 2013 and
followed a decade of low feedlot profitability. This has
helped import volumes, especially for manufacturing
beef. Over the medium term little change is expected in
US demand levels with consumption likely to remain flat
resulting in little change in import demand.
The Middle East and Africa, which accounts for 16% of
global imports, is likely to see further demand growth
over the medium term but will remain price sensitive.
Africa’s west coast remains short of meat and needs to
import increasing volumes, albeit lower value cuts.
Imports into the EU have been suppressed since 2008
by supply issues in South America and from increased
competition for this beef from other regions, most
notably Asia. For the period to 2019, modest growth
is anticipated in beef imports into the EU. Growth in
volumes from traditional suppliers such as Brazil will be
limited. Much of the growth in imports is likely to come
from the US, Canada and Australia to fill the new quota
of 50,000 tonnes for high quality beef. In terms of EU
exports, the recent suspension of EU imports by Russia
reduces the market options available to exporters.
However, shipments to Russia from the EU stood at just
32,000 tonnes in 2013.
SUPPLY
Mixed trends expected in global
beef output
Varying trends in beef output are anticipated among
the main global producers. Over the period to 2019, a
rise of around 8% or 400,000 tonnes is projected in the
combined export volumes of the United States, Brazil,
Australia, Uruguay and Argentina. Between them these
countries account for 60% of global beef exports. This
level of increase is equivalent to the anticipated growth
in demand in China, which highlights the positive
balance anticipated in supply and demand across the
leading regions.
Beef Import Trends by Region
Beef imports by region ('000 tonnes)
3000
2500
‘000 tonnes
8
14%
Increase in global import demand
of more than 1m tonnes
29%
2000
11%
1500
2%
2014(f)
1000
14%
500
0
Other Asia
China
M East/
N Africa
USA
EU
2019(p)
Source: Bord Bia based on Gira
Bord Bia Meat & Livestock Market Outlook
Modest growth in US output
Middle East and Asia. The reduced focus of Brazilian
exporters on the EU market is expected to continue.
Lower Australian output in 2015
The price response to the current shortfall in US beef
supplies is likely to provide an incentive for farmers to
rebuild herds over the medium term. However, any
growth in output is likely to be modest with forecasts
suggesting a rise of just 1% by 2019 relative to 2014.
Australian beef production has been slowly trending-up
very slightly over the last decade in an improving export
climate. The peak in production recorded in 2013-14
reflects drought induced culling, and will result in a
200,000 tonnes fall in production in 2015.
With flat consumption and some rise in beef imports,
volumes of US beef available to export are forecast to
rise by at least 10%. Any increase in shipments will be
largely destined for Asia with some additional volumes
also expected to be targeted at Europe to fill the new
high quality beef quota.
The most positive medium term outlook is for a
recovery from this, led by higher prices reflecting an
ongoing strong export demand. Australian exports in
2019 could stand at around 1.7 million tonnes, a rise of
10% on the levels forecast for 2014.
Higher Brazilian exports to be
focused on Asia
Limited export growth from other
South American countries
Brazilian production continues to recover slowly from
the impact of strong disposals in 2006-7. Conversion
to a variety of arable crops constrains future production
and continues to attract fertile land away from grass
in the south and west. Brazilian production in 2019 is
expected to be around 3% or 250,000 tonnes higher
than 2014.
Recent and future beef production growth in Uruguay
is limited by competition for land from the more
profitable soy bean growers. Import demand growth
from Asia, especially China has pulled Uruguayan beef
volumes from Russia, the US and even the EU. This
trend will likely continue in the medium term. Modest
growth in export volumes is likely in the period to 2019.
With further growth expected in domestic
consumption, Brazilian exports are expected to increase
by less than 10% between now and 2019. Any increase
in shipments will be pulled into growth areas of the
World Beef Price Comparison
450
400
350
300
250
200
150
2009
EU YB
2010
IRL Steer
2011
USA Steer
2012
2013
Brazil Steer
2014
Aus Steer
Source: Bord Bia
9
10
Bord Bia Meat & Livestock Market Outlook
Argentina’s beef sector has been negatively affected by
low profitability and a difficult political environment.
Current forecasts suggest exports of Argentinian beef
will be around 200,000 tonnes by 2019, down by
50,000 tonnes on 2014 and 450,000 tonnes on exports
recorded in 2009.
Better balanced EU Market anticipated
Following a rise in EU-28 output this year and next,
some gradual easing in output is anticipated by 2019 to
reach 7.45 million tonnes. However, the rate of decline
is likely to be less than that evident over recent years as
the cow herd is helped by the removal of dairy quotas.
Some countries should see an increase in production,
especially those with strong dairy industries such as
Ireland, Netherlands and Denmark.
As the eurozone economies recover, there is an
improving outlook for beef demand, which will help
to stabilise consumption levels. A more stable supply/
demand balance combined with some increase in
import volumes will boost EU exports, which are
expected to rise by 50% by 2019 to 270,000 tonnes.
New export opportunities for by-products and selected
cuts into specific markets are likely to be available to
EU exporters over the medium term. Russia will remain
short of meat despite efforts to find alternative sources
as the global supply balance means that they will not
be able to replace lost product from major supplying
regions such as the EU and US.
Beef Exportby
Trends
by Region
Export Availability
Region
(’000 tonnes)
2000
2014 (f )
+9%
+10%
1800
2019 (p)
‘000 tonnes
1600
1400
+12%
1200
Export availability
to rise by 400,000
tonnes
1000
800
600
+11%
400
-20%
200
0
Brazil
Australia
USA
Uruguay
Argentina
Source: Bord Bia based on Gira
Bord Bia Meat & Livestock Market Outlook
Bord Bia Meat & Livestock Market Outlook
Sheep
Outlook
New Season Lamb Supplies
Reach 6 year High
total throughputs for 2014 will approach the 2.7
million head. With average carcase weight rising by
1% during the year production is forecast to reach to
just over 53,000 tonnes.
Total sheep supplies for the first eight months of 2014
were running 2% higher, equivalent to an additional
45,000 head above the same period in 2013. With
fewer lambs carried over from 2013, throughputs
during the main hogget season were back 6% on the
previous year at 734,000 head. However, in sharp
contrast new season lamb supplies reached a six year
high largely due to an exceptionally good lambing
season and a plentiful supply of grass throughout
the spring and summer months. For the period May
to August total new season lamb supplies stood at
984,000, representing an 8% increase on last year.
Absence of Libya impacts on
Live Trade
Exports in live sheep have fallen significantly on the
record highs of last year largely due to the absence of
a live trade to Libya. Up until the end of July 2014, live
exports stood at 10,768 back 27,164 head, equivalent
to a 72% drop year-on-year. In 2013 almost 60% of
our total live exports were destined for Libya however
with the growing instability in the market, live exports
ceased. Looking ahead, live exports should pick up in
the lead up the Muslim festival of Eid-al-Adha which
falls on the 4th October.
5% increase in sheep meat
production
Average Sheep prices up 3%
With reports of good breeding sales and brisk trade for
the store lambs there is a growing sense of optimism
at farm level. In line with this renewed confidence
it is expected that the breeding flock will increase by
2-3% to 2.7 million. On the basis that sheep disposals
continue to hold strong for the remainder of the year
At €4.88/kg average prices for the first eight months
of the year were up 3% or 15 cent. A significant part
of this price gain was achieved during hogget season
(Jan-April), where average prices reached €4.91/kg up
Sheep Throughputs 2014 vs 2013
Source: DAFM and Bord Bia
11
12
Bord Bia Meat & Livestock Market Outlook
recent years as a knock-on effect of drought and the
competition for land from other enterprises such as
dairy. According to Beef and Lamb New Zealand the
2014-15 export lamb slaughter is forecast to decrease
by 3.3% to 19.5 million head. The decline reflects an
increase in hoggets retained with the flock expected to
show a slight recovery in the year to 30 June 2015.
38c/kg on the previous year. Prices remained strong
throughout May and June at a time when traditionally
seasonal price adjustment normally kicks in. By early
July, prices eased as weekly throughput levels both in
Ireland and the UK increased. For the season to date
(May – mid Sept) average prices for new season lamb
were marginally back by 6 cent at €4.87/kg. With the
average weekly kill running 6% above 2013 levels since
late August the expectation is that supplies will continue
to hold strong for the remainder of the year. Given that
markets continued to be subdued as consumers are
cautious in their spending any imbalance in supply
and demand could lead to some downward pressure
on price.
As confidence builds on the back of improved prices the
medium term outlook is that gains in production and
export availability will be directed towards Asia. It is worth
noting that 2013 was the fourth successive year that
New Zealand failed to fill their EU quota. Coincidentally
2013 was also the year that China became New Zealand’s
largest export market by value and volume.
Ireland & UK buck the European
decline in production
Sheep meat production in the EU has been through a
period of decline, with four of the largest producers
(UK, Spain, France and Ireland) recording a fall in
production over the last decade. However similar to
Ireland production in the UK has increased over the last
five years. With a 2% increase in the UK breeding flock
and improved lambing rates in 2013 sheep disposals
for 2014 are forecast to be up 5% on last year to 13.06
million head. Combined with higher carcase weight
the supply of new season lamb for the remainder of
2014 would see UK production above 300,000 tonnes
for the first time since 2009.
Production continues to stall in
New Zealand
Australia and New Zealand are clearly the dominant
sheep meat exporters, representing 86% of global
trade in 2013. Their export volumes have fallen in
China Imposing on the Global Sheep
Meat Market
Demand for sheep meat has been strong in Asia and
in particular in China where growth is expected to
increase by 3.6% in 2014/15. China has developed
a significant appetite for sheep meat and despite it
boasting the biggest sheep flock in the world demand
has outpaced domestic supplies. China now accounts
for some 46% of global sheep meat consumption
China’s sheep meat imports are primarily sourced from
New Zealand and Australia, with Uruguay contributing
a small share of import volumes. The volumes and
values of Chinese imports have risen sharply and now
account for almost 30% of global trade compared
with less than 10% five years ago. Imports to China
are largely frozen due to poor logistics. While China’s
trade in sheep meat is principally from the southern
hemisphere, the Irish industry is set to gain from the
ripple effect of global demand outpacing supply.
Securing market access into China remains a priority
focus for the industry.
Average Irish Sheep Prices 2014 vs 2013/2012
Comparison of Average Sheep Prices (2012-2014)
600
Hogget Season
550
New Season Lamb
2014
€4.87
-6c/kg
2013
€4.91
+38c/kg
2012
500
450
400
350
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Source: DAFM
Bord Bia Meat & Livestock Market Outlook
Bord Bia Meat & Livestock Market Outlook
Pigmeat
& Poultry
EU breeding herd and pig
supplies in decline
International pig supplies tighten
Some producers across Europe continue to downsize,
destock or exit the industry following the introduction
of sow welfare legislation in 2013. EU breeding sow
numbers in December 2013 showed a fall of 2%. This
decline has been reflected in EU pig supplies, which
were down by 1% up to the end of June. To date in
2014 Irish production is running 2% ahead of last year.
EU pig prices have eased in 2014 with a drop of 6%
recorded year to date reflecting increased competition
from other meats and a slower international demand
over recent months, driven largely by the Russian
suspension of imports from the EU and United States.
Prices in early September were around 16% lower than
the same period last year. Irish pig prices year to date
are running around 1% lower at €1.63/kg dw.
After reaching record highs this summer, global
pigmeat prices have eased on the back of a seasonal
increase in supplies, Russian import bans and lower
than expected losses resulting from the Porcine
Epidemic Diarrhoea virus (PEDv).
In the US, the total number of pig farms
that have tested positive for PEDv stands
at almost 8,200 in thirty states. Recent
forecasts suggest that US production will decline by
5% in 2014 with lower numbers being partly offset by
higher carcase weights. In July, US pig prices peaked at
just above €2/kg dw.
In Mexico, a significant number of farms
have been exposed to PEDv, particularly
in Northern and Central Mexico which is
expected to leave output 10% lower for 2014. PEDv is
also present in Canada and if the pace of the outbreak
matches that in the US, pigmeat production could
begin to decline in late 2014 and through into the
summer of 2015.
EU Pig Production Jan – June 2014
(% Change vs. 2013)
8
EU Reference and Representative Prices
(€/100kg dw excl. VAT)
7
6
4.9
w/e
06.09.2014
% change
vs. 2013
Average
to date
% change
vs. 2013
EU
163.8
-16.2
163.5
-6.4
Denmark
149.8
-11.6
149.7
-5.2
Netherlands
168.7
-13.1
164.8
-5.2
Germany
168.7
-13.1
164.8
-5.2
Ireland
159.3
-2.8
162.5
-1.4
4
1.7
2
0.7
0.2
0
-2
-0.8
-1
-1
-1.8
-4
-6
-8
-10
-12
-13
-14
d
lan
Po
rk
De
a
nm
S
in
pa
UK
d
lan
Ire
nce
Fra
E
8
U-2
th
Ne
ny
G
a
erm
ly
Ita
Source: EU Commission
13
14
Bord Bia Meat & Livestock Market Outlook
developing world. With some of these markets unlikely
to satisfy their domestic demand, this will lead to an
increased import pull from established suppliers, which
should support price levels. The main beneficiaries from
this opportunity are the US and EU. Projections from
the latest OECD-FAO outlook suggest that Chinese and
African import demand is expected to increase by 39%
and 52% to 982,000 and 522,000 tonnes, respectively
by 2019.
In Brazil, strong Russian demand has
resulted in prices now running at similar
levels to EU prices. Six pigmeat export
plants are now approved to supply Russia,
compared to just three last year. Brazilian output has
been showing modest growth of less than 2% annually
over recent years and this trend seems set to continue.
Declining farm gate prices in China has
forced some producers to reduce stock
levels. Sow inventory levels recorded
earlier this year stood at 48.7 million head,
the lowest level seen since late 2011. According to
Rabobank the continued sow liquidation should help
Chinese pork prices recover from the beginning of Q4
2014. In August, China banned six US processing plants
using feed additives.
Poultry
The outlook for the EU broiler industry is relatively
positive for the remainder of 2014 and into next
year due to lower feed costs, relatively high pork and
beef prices. However the implementation of special
safeguard measures introduced by South Africa against
certain EU countries over anti dumping fears will have
some negative impact for trade until new markets are
developed.
Import demand in Japan has increased
significantly in 2014 reflecting the impact
of PEDv since it emerged in October 2013.
Imports up to the end of July were running 15% higher
at 487,000 tonnes driven by increased shipments
from EU suppliers and Mexico. In South Korea,
sow liquidation in 2013 has boosted demand levels
significantly in 2014.
South Africa has become an important export market
for EU exporters (up to 15% of total export volume).
The most recent EU average broiler price is over 1%
lower compared to corresponding period last year at
€1.93/kg dw.
The Russian pigmeat industry has been
heavily impacted by the ban on EU
pigmeat imports. Total pigmeat (excluding
offal) imports fell by 27% to 175,000 tonnes for
the first half of 2014 reflecting the absence of EU
product on the market. Russian pigmeat prices are
expected to rise further as domestic supplies cannot
meet demand levels.
The EU broiler meat trade balance looks set to continue
in surplus over the short to medium term reflecting
stable import levels and rising exports. For the first 6
months of 2014, EU exports have grown by over 1%
with higher volumes to South Africa, Benin and the
Philippines particularly evident.
EU imports over this period have fallen by 5%, with
Brazilian and Thai import volumes 3% and 12% lower,
respectively. Imports from Thailand have fallen in
response to the Japanese market reopening for their
raw chicken product.
Medium term outlook
remains positive
The future outlook for pigmeat is for increased global
demand, led by higher disposable incomes in the
EU Average Broiler Price €/100 kg dw
Source: EU Commission
Bord Bia Meat & Livestock Market Outlook
Bord Bia Meat & Livestock Market Outlook
Bord Bia Promotional
Activity
Chefs’ Irish Beef Club
Following the launch
of the Chefs’ Irish Beef
Club in Italy a group of
chefs on a farm visit.
Top German and
Swedish chefs enjoying
the ‘Clash of the Ash,’
Co. Kilkenny.
Welcoming new member chefs to include Ashely Palmer
Watts, Restaurant ‘Dinner – by Heston Blumenthal’. The
5th best restaurant in the world.
Sheepmeat
Bord Bia hosted a farm visit
for Chinese government
officials.
David Gillick, Irish Olympic
Athlete and Winner of
MasterChef Ireland promoting
Quality Assured Irish lamb.
In an initiative to highlight the
growing importance of the
Nordic markets Bord Bia hosted a
producer study visit to Denmark
and Sweden.
Pigmeat & Poultry
Ray D’Arcy, Today FM announcing the
winner of the Bord Bia HAMbassador
Award.
World’s fastest omelette maker
Howard Helmer from the US
showcasing his culinary skills.
Ella McSweeney, Ear to the
Ground, David Wallace, Irish Rugby
Player and Neven Maguire come
together to promote Irish Quality
Assured ham at Bloom.
15
Bord Bia Meat & Livestock Market Outlook
Bord Bia Promotional
Activity
Beef
Chinese vice President
Mr Liu Yunshan and
Minister of State , Tom
Hayes T.D. meet at
the farm of Tom and
Geraldine Short in Co.
Wicklow.
Inward Customer Visit by Scandinavian buyers,
Summer 2014
Bord Bia’s promotional
campaign in Holland
building a preference
for Irish beef based
on eating quality,
animal welfare
and environmental
sustainability.
Belgian TV filming in
Kilkenny for a programme
profiling the superior taste
of Irish beef
Savouring the Flavour of
Irish QA Beef in a highend Paris Supermarket
Launching Bord Bia’s
summer Irish beef
campaign in Holland,
which ran for 10 weeks,
achieving over 20 million
advertising impressions
Irish beef promotion,
incorporating over 4,000
retail stores across the top
four German retailers
Premium Irish beef served
to over 300 top Italian
Chefs at an event in
Bologna
Promoting the premium
premium Irish “El Chef
Irlandes” beef brand to
Spanish consumers
Livestock
Bord Bia undertook a trade advertising campaign promoting Irish
weanlings and calves to Spanish, Dutch and Italian cattle buyers
Italian livestock buyers visiting Nicholas
Bergin’s farm, Co. Tipperary
Bord Bia, Clanwilliam Court, Lower Mount Street, Dublin 2, Ireland
www.bordbia.ie