Beef Market & Cattle Supply Prospects
21st January 2009
Joe Burke, Bord Bia
Cattle Supplies ‘08
Export plant throughput: change 2008 vs. 2007
(‘000 head)
+5,000
+ 2,000
0
-14,000
-20,000
-28,000
-40,000
-60,000
-80,000
-77,000
-100,000
-120,000
-112,000
Total
Steers
Young Bulls Heifers
Cows
Others
Agenda
• Cattle Supply ’08 & Availability ‘09
• Distribution of Exports
• Review of UK & Continental Markets
• Imports into EU
Cattle Supplies ‘08
• What were the drivers?
• Supply of stores lower:
– 2006 Live exp.s increased by 65,000
– 2006 calf births fell by 19,000
• Lighter carcase weights
• Disposal patterns:
– Disposals from June to November level with ’07
•
Producer decisions:
– Some carry over into 2009 (BSE testing change)
– Young bulls increased from 8% to 9% of prime cattle kill
Cattle Supplies ‘08
(‘000 head)
2006
2007
2008
Lower
2009(f)
Upper
2009(f)
Total
1,692
1,692
1,580
1,592
1,624
- Steers
811
779
702
710
724
- Y Bulls
79
105
107
106
112
Total Males
890
884
809
816
836
- Heifers
418
425
411
414
425
- Cows
358
357
329
341
349
- Other
25
25
30
28
30
Cattle Supplies
First half of ‘09 vs. ‘08
(‘000 head)
30,000
30,000
25,000
20,000
15,000
13,000
10,000
10,000
10,000
6,000
5,000
5,000
6,000
3,000
0
0
0
-2,000 -1,000
-5,000
Total
Steers
Young Bulls Heifers
Cows
Others
Cattle Supplies ‘09
Key Factors:
• Live exports fell by 42,000 in ’07 to 208,000
• Lower calf registrations in ‘07: -30,000
• Some carry-over of finished cattle into 2009
• Less replacement heifers likely to be retained in 2009
and higher cull cow disposals
• Drop in feed prices will benefit intensive finishers /
young bull producers
• DAFF destruction of dioxin – restricted herds
Export Beef Distribution
+5%
-10%
-6%
-10%
-8%
(‘000 tonnes)
2006
2007
2008(e)
TOTAL
522
523
483
UK
267
278
261
Continental EU
217
239
217
France
Italy
Holland
Scandinavia
55
47
41
35
56
48
47
42
50
44
42
44
Other EU
39
45
37
International
38
6
5
of which:
Prices - Deadweight
R3 Male Cattle prices (c/kg dw)
3.80
3.60
3.40
3.20
3.00
2.80
2.60
2.40
2.20
2.00
Italy
France
GB
ROI
Jan Mar May
2007
Jul Sep
Nov
Jan Mar May
2008
Jul Sep
Nov
€uro : Sterling
Exchange Rate
R3 steers (c/kg dw excl VAT)
400
350
GB R3 steer
300
250
Ireland R3 steer
08
vNo
Se
p-
08
8
l- 0
Ju
8
-0
ay
M
-0
8
ar
M
Ja
n-
08
07
vNo
Se
p-
07
7
l- 0
Ju
7
-0
ay
M
-0
7
ar
M
Ja
n-
07
200
Irish R3 Price rose by 15% in 2008, while GB price only rose by 8% in €uro terms
€uro : Sterling
Exchange Rate
Euro vs GBP
1
0.95
0.9
0.85
0.8
0.75
0.7
Jan-08
Mar-08
May-08
Jul-08
Sep-08
Nov-08
Jan-09
GB Deadweight
price in £ stg.
GB R3 steer (p/kg dw excl VAT)
300
250
200
Ju
l-0
8
Se
p08
N
ov
-0
8
M
ar
-0
8
M
ay
-0
8
Ju
l-0
7
Se
p07
N
ov
-0
7
Ja
n08
7
M
ay
-0
M
ar
-0
7
Ja
n-
07
150
GB producer price 2008 rose by 26% in Sterling terms
United Kingdom
2008 Review
•
4.5% Decline in GB prime cattle throughput (N.I: 6%)
•
UK cow beef production rose by 14%
•
Beef exports from UK ↑ 25% (56,000t pw for Jan – Sept)
(Markets: ROI 37%, NL 32%)
•
Weakening of £ stg. vs. €uro made imports more expensive,
and thereby domestic product more competitive.
2009 Outlook
•
Predict Lower UK supplies of prime cattle and cows
•
Production predicted to fall by 1.5%
•
However, consumption likely to drop by 1.5%
•
Therefore, import requirement could fall
UK Beef Consumption and
Consumer Demand
GB Household beef purchases for 12 weeks ended 30 Nov 08
+3.7%
5
+4%
0
-0.5%
-2.0%
-5
-6.7%
-10
-15
-16%
-20
Beef
Source: TNS
Roasting
Steak
Mince
Burgers /
grills
Stewing
France
•
French female beef production declined by 3.5% in 2008,
though expected to rise again in 2009
•
Predict a 1.5% fall in domestic consumption
•
French beef exports related to livestock situation
•
French Young bull slaughterings up to end Sept ’08: 776,000;
an increase of 1.0 % on the same period in 2007
Distribution of French Live Exports Jan – end Nov 2008
(000’
(000’ head)
2007
2008
% change
Total
929
843
- 9.3 %
Italy
859
718
- 16.5 %
Spain
115
91
- 21 %
Greece
13
19
+52%
Italy
• Scarcity of beef on the market, especially of young bull beef:
- Less domestic production on account of lower live imports
- Consumer demand also lower
Italy Beef and Veal Balance
2006
2007
2008
2009
Net production (000 tonnes cwe)
- Male beef
1,111
677
1,127
692
1,070
640
1,090
665
Meat imports (000 tonness cwe)
505
473
456
430
Meat exports (000 tonnes cwe)
144
138
150
155
Consumption (000 tonnes cwe)
Source: Bord Bia
1,472
1,462
1,376
1,365
Other beef
import markets
•
Netherlands
– Production declined in 2008 (-15%) due to less cow beef
– Imports only slightly lower:
• Despite sharp fall (-66% in Jan-Sep) for Brazil
• Germany the main beneficiary; shipments +13%
– Little change expected for import levels in 2009
•
Sweden
– Swedish prime beef production declining (-3% in Jan-Sept)
– Imports increasing (+8% in Jan-Sep):
With Ireland increasing market share to 43%; shipments +26%
– Import demand to ease slightly in 2009?
EU beef balance:
- Scarcity of supply in 2008
- Small increase in availability likely for 2009
(from slightly increased EU imports / reduced exports)
EU-27 Beef and Veal Balance
2006
2007
2008
2009
Net production (000 tonnes cwe)
8,132
8,188
8,040
8,045
Meat imports (000 tonness cwe)
- Chilled/frozen
585
485
500
388
335
240
360
260
Meat exports (000 tonnes cwe)
185
111
150
110
Consumption (000 tonnes cwe)
- Per capita
Source: Bord Bia
8,532
17.3
8,577
17.3
8,225
16.5
8,295
16.6
EU prime beef production falling
EU Male Beef Production
(% Change 2009/08)
•
EU Production to fall by up to 1%
or 45,000 tonnes in 2009
4.0
3.0
2.0
•
All major countries showing
some decline, with exception of
Italy, Netherlands & Ireland
1.0
0.0
-1.0
-2.0
•
Little change expected in overall
availability in 2009
-3.0
-4.0
Italy
Neth
Ire
UK
Ger
Sp
Fr
Total
of
these
Brazilian imports lower
•
Chilled shipments 90% lower
•
Frozen exports to EU down by 77%
•
Processed shipments 6% lower
•
Some increase in number of farms
approved expected
– Currently 733
– Additional states approved
Brazilian beef exports to the EU
Jan to Nov (tonnes pw)
300
200
100
0
Total
•
Frozen Processed Chilled
Total imports from Sth. America
37% lower
2007 2008
Source: GTIS