1
Global and European beef
market update
2
Table of Contents
Executive Summary ...................................................................................................................... 3
Global Beef Production and Export Availability .......................................................................... 5
Trends by key countries ................................................................................................................ 7
Brazil ..................................................................................................................................... 7
Argentina ............................................................................................................................... 8
Uruguay ................................................................................................................................. 9
United States ....................................................................................................................... 10
Australia .............................................................................................................................. 11
Import developments for key regions .......................................................................................... 12
EU Beef Market Developments .................................................................................................. 14
Overall EU Market .............................................................................................................. 14
United Kingdom .................................................................................................................. 16
France .................................................................................................................................. 17
Germany .............................................................................................................................. 18
Italy...................................................................................................................................... 19
Poland .................................................................................................................................. 19
Sweden ................................................................................................................................ 20
Netherlands.......................................................................................................................... 20
Spain .................................................................................................................................... 20
Ireland.................................................................................................................................. 21
Appendices .................................................................................................................................. 23
United States beef exports Jan-Sept 2012, tonnes pw......................................................... 23
Brazilian beef exports Jan-Oct 2012, tonnes pw ................................................................. 23
Australian beef exports Jan-Sept 2012, tonnes pw ............................................................. 23
Argentinean beef exports Jan-Oct 2012, tonnes pw ............................................................ 24
Uruguay beef exports Jan-Oct 2012, tonnes pw ................................................................. 24
Irish beef exports, ‘000 tonnes cwe, 2011-2012 ................................................................. 24
2013 European Consumption Trends, ‘000 tonnes ............................................................. 24
3
Executive Summary
Amongst the key exporting countries, global beef output in 2013 is expected to fall on 2012
levels. Any recovery in production anticipated across South America and Australia in 2013 will
be offset by lower output in the United States, as stronger feed prices impact on output. Beef
production is expected to fall slightly to 25.7 million tonnes.
Global demand for beef is fundamentally strong. However, exports amongst the key countries
are predicted to fall by 1% to 4.77 million tonnes in 2012, with the US and Argentina being
responsible for this drop. In the case of the US, the effects of declining cattle numbers are
now being felt. While export taxes and currency strengthening is reducing Argentinean trade.
A recovery of almost 6% in global exports amongst the five global exporters is expected in
2013. However, the extent of this recovery will be based on combination of different factors.
These include global demand from emerging markets, some increase in Brazilian output
combined with a fall in US consumption which will more than offset a slowdown in US
production.
 Beef output amongst ‘the big 5’ in 2013 to ease slightly to
Against a background
25.7 million tonnes.
of diverging economic
 Lower Argentinean beef exports forecast for 2013.
growth amongst the
main global importers,
 Global exports to increase by 6% on the back of increased
consumer demand in
Brazilian output and lower US consumption.
the EU, Japan and the
US is being helped by
 EU output to fall slightly in 2013. A decrease in French,
consumers switching
German and Italian supplies will be partly offset by higher
Irish output.
to better value cuts.
Import demand from
key regions such as
Russia, the MENA
(Middle East, North
Africa)
and
Asia
continue to absorb
excess ‘big 5’ exports.
 Strong import demand evident in the MENA, Asia and
Russia.
 Irish cattle supplies to recover by 10%.
 European consumer demand will remain under pressure
in key markets such as Italy, France and Spain during
2013.
EU beef production is
expected to fall by over 5% to 7.7 million tonnes in 2012, with male beef output falling the
furthest. Output will remain under pressure in 2013, reflecting some further tightening in
French, German and Italian supplies, which will be only partly offset by higher Irish output and
to some extent, slightly higher UK and Swedish output. Cow beef production though could
well edge up because of feed shortages, combined with a weaker milk market in some
member states.
EU beef imports are expected to fall by almost 7% in 2012 due to stronger demand across
international markets for tight South American supplies. Higher Turkish import tariffs are
expected to restrict exports. Some recovery in EU imports is forecast for 2013.
4
Import demand from the UK is likely to remain strong going into 2013 on the back of
favourable exchange movement. UK output in 2013 is expected to show some slight upward
movement, as production is forecast to reach 892,000 tonnes.
Demand for beef is expected to fall in France in the short term, reflecting challenging
economic conditions and a decline in domestic supplies. For 2013, consumption is expected to
fall by just over 1% to 1.61 million tonnes.
A decline in German shipments has led to a reduction in import levels, due to higher German
export prices and a reduction in consumer purchasing power. Most of the fall in shipments
has occurred in non EU markets, such as Turkey and Russia.
Subdued consumer demand in France, Italy and Spain is expected to persist. For 2013, beef
consumption is expected to fall by 2% in Italy, and 1% in both Spain and France.
European cattle prices have firmed by 11% across most EU markets during 2012.
Irish cattle prices performed strongly throughout 2012, with a rise of 12% evident for steers
and 13% for heifers. Irish prices exceeded the European average up until the beginning of
September. The weakening of the value of the Euro against Sterling has benefited Irish
exports to the UK.
Irish finished cattle supplies for 2012 were equivalent to 1.4 million head, which compares to
1.57 million head on prior year levels. Next year, this is likely to recover by around 10%
reflecting the reduced level of live exports in 2011 combined with higher calf registrations.
5
Global Beef Production and Export Availability
Forecasts for the main global beef exporters for 2012 show some increase in beef supplies,
particularly in Brazil and Argentina, as combined supplies are expected to increase by almost
4% to 11.42 million tonnes. However, any increase in global output will be somewhat offset by
on-going tight US supplies, with production expected to increase by just 1% to 25.84 million
tonnes amongst the key global producers.
Global Beef Output & Exports (‘000 tonnes cwe)
2009
2010
2011
2012(f)
2013(p)
11,891
8,275
3,376
2,106
537
26,185
12,047
8,562
2,626
2,133
516
25,884
11,997
8,515
2,497
2,129
486
25,624
11,720
8,850
2,575
2,182
515
25,842
11,260
9,000
2,650
2,255
555
25,720
1,853
1,370
878
391
661
5,153
1,800
1,363
1,043
366
310
4,882
1,568
1,400
1,265
340
251
4,824
1,675
1,416
1,125
380
175
4,771
1,725
1,468
1,260
410
170
5,033
Production
United States
Brazil
Argentina
Australia
Uruguay
Total
Exports
Brazil
Australia
United States
Uruguay
Argentina
Total
Source: Bord Bia estimates based on Safras, INAC, USDA, MLA
For 2013, virtually the same pattern of production is expected. However, the rate of decline in
US output should be more pronounced. The rate of growth in the other key countries is
expected to slow down. Total output amongst the ‘big 5’ is forecast to decline slightly to 25.7
million tonnes.
The volume of beef available to export looks set to fall again in 2012 on the back of tight
Argentinean and American supplies, as higher export taxes in Argentina and the US drought
situation affects supplies. For the year, exports from the five leading exporters are forecast to
fall by 1% to 4.77 million tonnes. This weakening in trade is being offset by stronger Brazilian
and Uruguayan exports, helped by some depreciation in their domestic currency. A recovery
of almost 6% in global exports is expected for 2013. Recent IMF growth projections suggest
that most global economies will recover next year. This should lead to an increase in demand
for beef in key regions.
6
80%
60%
40%
20%
0%
2008
2009
Brazil
2010
Argentina
2011
2012
US
Global R3 steer prices, c/kg excl VAT
450
400
350
300
250
200
150
100
50
0
2008
2009
Brazil
Argentina
2010
2011
United States
2012
EU
Jun
May
Apr
Mar
Feb
Jan-12
Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan-11
US$/tonne prod wt. fob
Global
export
World Chilled/Frozen Beef Export Prices
10,000
prices for beef
9,000
have
been
largely stable in
8,000
2012.
In
7,000
January6,000
September
5,000
2012,
the
4,000
average
price
for chilled and
United States
Australia
Argentina
frozen beef in
Brazil
and
Uruguay was 3% and 5% stronger, respectively, on prior year levels. Argentinean prices were
14% higher due to strong domestic cattle prices. Export prices have been firm for the United
States, with prices 28% higher year-on-year during the 2012 Jan-Sept period. Australian
export prices have been 12%
Global steer prices as a % of the EU average
higher for the same period in
100%
2012.
7
Trends by key countries
The following pages summarise some of the principal trends evident among the key global
beef exporters, which between them account for around 35% of global
trade.
Brazil
Beef production increasing again
Beef production declined marginally in 2011 after increasing by 3% in
2010 given lower prime cattle supplies. This was despite cow supplies rising by 10%.
In 2012, beef production jumped by 5% during the January-June period, reflecting increased
prime cattle and cow supplies, combined with higher carcase weights helped increase output.
The number of cattle on feedlots is somewhat higher in 2012, which is expected to maintain
supplies during the second half of the year. However, higher feed costs are likely to place
some downward pressure on output.
In 2013, output is expected to increase by around 2% to 9 million tonnes. In comparison to
2009 levels, output is expected to be 9% higher. Growth in production is expected to slow
down as higher feed costs reduce the attractiveness of feedlot production. According to
Safras, feedlot throughput is expected to reach 3.2 million head (equivalent to 10% of total
throughput) in 2012, up 13% on a year earlier. The recent increase in both soya and maize
prices will continue to make crop production more attractive relative to cattle production.
Beef exports moving up
200
Brazilian Beef Exports, '000 tonnes cwe
180
Beef exports in 2011 fell for
the fourth consecutive year 160
and were 37% below their 140
peak of 2007 and 13% lower 120
than in 2010.
The poor 100
performance in 2011 reflected
80
good domestic demand in a
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 2011
year when domestic supplies
were lower, and the strong real made exports less competitive.
There was a marked decline in shipments of chilled and frozen beef to Russia (not helped by
Russian restrictions), Iran and Egypt. These exports were partially offset by increased trade
with Venezuela and Chile.
In 2012, in spite of a slow start to the year,
monthly export volumes have picked up
steadily. This is due to some depreciation in
the value of the Real in response to lower
interest rates, some increase in output,
stronger export demand combined with
some fall in domestic demand.
Distribution of Brazilian beef exports,
Jan-Oct 2012
Russia
22%
26%
Egypt
EU-27
6%
13%
7%
7%
Hong Kong
Venezuela
9%
10%
Iran
8
In the first ten months of 2012, trade recovered by 13% despite ongoing difficulties with
supplying Russia. Exports to other key markets performed strongly. The strongest growth was
evident to Chile, Egypt, Hong Kong and Venezuela, with shipments increasing by 114%, 47%,
36% and 34% respectively.
Brazilian beef exports trends
Trade to Europe increased by
40%
just 3%.
Exports are expected to remain
competitive
during
the
remainder of 2012.
20%
0%
-20%
-40%
For 2013, some further
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
recovery
in
exports
is
anticipated,
with
exports
2012/11
2011/10
predicted to grow by 3% to
1.73 million tonnes. However, exchange rates will continue to be an important issue, as any
appreciation in the Real will reduce the competitiveness of Brazilian exports. Consumption is
expected to rise by almost 1% to 7.1 million tonnes. Compared to 2009 levels, this represents
an increase of 10%.
Brazilian Prices 11% lower
Brazilian cattle prices fell by around 11% to €2.29/kg during 2012, reflecting some
depreciation in the Brazilian Real against some of the major currencies, combined with the
rise in output levels.
Argentina
Beef production remains low
Beef production declined by a further 5% in 2011, following an even
sharper fall of 22% in 2010. The decline in 2011 reflected lower cow supplies as producers
rebuilt their herds following the drought of 2008 and 2009.
In 2012, a modest recovery of 3% in output for the first half of the year was evident, with a
similar increase expected during the remainder of the year, which should leave output 3%
higher at 2.58 million tonnes for the year. This reflects a rise in prime cattle supplies,
coinciding with calf numbers for the first quarter of 2011 being 3% higher year on year,
despite cow numbers being lower.
In 2013, output is expected to increase by a further 3% to 2.65 million tonnes, as higher feed
costs are expected to lead to an increase in cows being culled.
In the medium term, a reduction in beef output is likely given that cow supplies have started
to rise again due to the drought during the summer, and other sectors remaining more
attractive.
9
Beef exports continue to
fall
Beef exports in 2011 fell
by 19% to 251,000
tonnes given the decline
in domestic availability,
and higher export taxes.
Compared with 2009,
exports were down over
60%.
Argentinean beef exports to the EU-27, tonnes pw
120,000
100,000
80,000
60,000
40,000
20,000
0
Despite
strengthening
supplies, exports have continued to fall in 2012. High domestic cattle prices coupled with
export taxes and rising domestic demand has disrupted trade. Consumption in 2012 is
expected to increase by almost 6% to 2.4 million tonnes on previous year levels. Shipments to
Russia during the first nine months of the year fell by 54%, and are 19% lower into the EU.
Compared to corresponding period ten years ago when imports from Argentina to the Europe
peaked, imports have fallen by almost two thirds.
Beef exporters are facing major challenges, and some export plants have been shut down.
Even if beef production shifts upwards, exports at best may only stabilise in 2013. Beef export
availability will be under further pressure from a further increase in domestic demand, with
consumption set to increase by 4% to 2.5 million tonnes.
Argentinean Prices
The latest Argentinean cattle prices available show an increase of over 14% to €3.02/kg during
2012, due to relatively tight supplies coupled with some growth in domestic consumption.
Uruguay
Beef production recovering
Cattle output fell by 6% in 2011, reflecting on-going herd rebuilding
coupled with strong live exports to Turkey.
Cow numbers in June 2012 were up 2.5% on a year earlier, while calf numbers were up 14% as
calving rates recovered following the previous drought. Cattle output has increased during
the first half of 2012 reflecting reduced live exports to Turkey, combined with some increase
in carcase weights. For the year, output is set to return to near 2010 levels at 515,000 tonnes.
In 2013, beef output is expected to increase by 8% reflecting an increase in prime cattle
availability coupled with some further increase in carcase weights.
10
Beef exports recovering
Beef exports in 2011
were down 7% to
340,000 tonnes given
the sharp decline in
domestic availability.
Uruguayan beef exports, '000 tonnes cwe
600
500
400
300
200
For 2012, shipments of
100
beef during the first
0
eight months of the year
2006
2007
2008
2009
2010
2011
2012 2013(f)
were 17% higher year on
year at 245,000 tonnes. Strong demand has pushed up shipments to North America by 39%,
while exports to Israel and Chile have almost doubled. In contrast, weak demand from the EU
has resulted in some stagnation in this trade at 39,600 tonnes. Export demand is likely to fall
back slightly during the remainder of the year, with exports forecast to finish up 12% higher at
380,000 tonnes for the year.
Export volume growth of at least 8% is expected in 2013, as the domestic supply situation
improves.
Uruguayan cattle prices 5% higher
Despite an increase in output, Uruguayan steer prices were 6% higher at €2.59/kg for 2012, as
global demand remains strong for limited global supplies.
United States
Beef production in decline
A reduction of 2% is forecast by USDA in beef output for 2012 given the
decline in the US cattle herd. The cattle inventory taken on July 1st showed 97.8 million head
in the herd. This was the lowest figure since the July 1st inventory started in 1973. The 2012
calf crop is expected to fall by 2%, reflecting a 3% reduction in beef cows, which represents
more than three quarters of the total herd.
A further decline in production seems likely for 2013. The most recent USDA forecasts indicate
a drop of 4% in output to 11.3 million tonnes. However, there are inevitable uncertainties
about this figure due to feed price developments.
Beef exports now falling
In response to strong global demand combined with a weak US dollar, beef shipments during
2011 were 21% higher at 1.27 million tonnes cwe
Shipments of beef for the first nine months of 2012 were 12% lower at 610,500 tonnes pw,
with trade to their main partners affected (Mexico, South Korea and Canada). This trend is
expected to remain unchanged for the remainder of the year. For 2012, beef consumption is
expected to fall marginally to 11.6 million tonnes.
11
United States beef exports Jan-Sept 2012, tonnes pw
Destination
% increase/decrease
Quantity
-14%
115,000
+4%
110,000
Mexico
-21%
90,300
South Korea
-21%
83,600
+5%
39,300
Hong Kong
+16%
40,700
Vietnam
+11%
35,800
EU-27
-10%
17,900
Canada
Japan
Russia
Some increase in exports is forecast for 2013. Most of this increase in export availability will
be driven by a 3% drop in consumption to around 11.3 million tonnes. In contrast to 2009
levels, consumption is expected to be 8% lower.
US cattle prices
Cattle prices for 2012 were 16% stronger at €3.34/kg, reflecting tightening domestic supplies
and some appreciation in the US dollar against some of the main currencies.
Australia
Slow recovery in beef production
Following some herd rebuilding in 2011 and into early 2012, the MLA
expect cattle supplies to build towards the second half of the year. This
would leave beef output 2% higher at 2.18 million tonnes for 2012.
For 2013, beef output is expected to increase by 3% as herd rebuilding should slow down
further, coupled with better pastoral conditions helping to lift weights.
Beef export demand
under some slight
pressure
Beef exports in 2011
were 3% higher at 1.4
million tonnes cwe.
Australian beef exports, tonnes pw (Jan-Aug)
800,000
600,000
400,000
200,000
For 2012, based on the
0
MLA
July
2012
Total
Japan
US
South Korea Russia
forecasts,
weaker
2011
2012
demand
on
the
Japanese and South
Korean markets is expected to lead to growth slowing to 1% for the year. For the first eight
months of year, exports have fallen by over 1% to 634,600 tonnes pw. However, exports to
the US, the second largest market for Australia, is expected to show growth. This is based on
12
strong manufacturing demand which led to exports surging by 38% up to the end of August,
despite the Australian dollar almost being on parity with the US dollar (which is historically
quite strong). Shipments of beef in 2013 are forecast to increase by 4% to 1.47 million tonnes
given the increased availability. This should lead to more shipments being diverted into
emerging markets, such as Singapore, Taiwan and Malaysia.
Australian cattle prices
The latest Australian steer prices for 2012 were some 9% higher at €2.64/kg compared to
prior year levels, reflecting tight global supplies during the first half of the year. The cow trade
is also performing strongly, with prices 6% higher reflecting strong demand for manufacturing
product.
Import developments for key regions
The following pages summarise some of the principal trends evident amongst the key global
beef importers. Russian import demand is discussed. This is followed up by some commentary
on Asian import demand, which is dominated by Japan, South Korea and China/Hong/Kong. In
addition, the region, Middle East and Northern Africa (MENA) is analysed, with countries such
as Egypt, Iran and Turkey being the most predominant countries.
Background
Import demand for beef has held up well in emerging economies, although some easing in
demand is likely given the slowdown in economic growth in these regions due to the
economic and financial challenges evident in developed economies.
Economic growth
For the developed economies, the October IMF 2012 forecasts indicate growth of only 1.3% in
2012. This is expected to improve to 1.5% in 2013. For the emerging and developing
economies, growth in 2012 is forecast to be 5.3%, down from 6.2% in 2011, with some
acceleration anticipated in 2013. Growth in Brazil in particular has slowed down to nearer 2%
(compared with 7.5% in 2010), although growth is expected to recover to 4% in 2013. A
slowdown in both Chinese and Indian growth is expected for 2012, with some recovery
expected in 2013.
This suggests that key exporters will continue to experience better prospects in the emerging
economies. Demand is likely to struggle in the developed economies, including the EU, Japan
and the United States, which continues the trend that started as far back as 2008. A shift
towards better value cuts like mince has become increasingly evident in these markets, along
with some consumers switching to alternative cheaper proteins.
Russian import demand struggling
Imports of beef recovered slightly after a slow start to the year. Imports for the first nine
months of 2012 were almost 2% higher at 468,000 tonnes, in response to strong economic
growth being evident, despite high food price inflation. Some slight recovery in Brazilian
imports has been evident in 2012. However, imports remain historically low because of
ongoing restrictions imposed by the Russian authorities, with the main beneficiaries being the
United States, helped by an increase in its tariff quota.
13
EU imports have been in decline throughout 2012, with lower shipments from both
Germany and Ireland evident. For 2013, the USDA is reporting that Russian import demand
will increase by 1%.
Russian tariffs
The current Tariff Rate Quota (TRQ) for frozen and fresh/chilled beef is 530,000 and 30,000
tonnes respectively, and is eligible for import at 15% in quota tariff rate
Russian imports from key exporters
2009
2010
2011
Jan-Sep 2011
Jan-Sep 2012
322,800
282,100
224,100
177,700
189,300
Paraguay
46,700
64,100
50,500
44,700
84,100
Uruguay
66,200
78,900
77,500
55,400
54,200
3,100
22,300
39,200
26,300
33,400
EU-27
16,400
78,600
79,300
55,600
34,200
Australia
16,200
41,200
65,200
51,000
27,100
2,900
22,500
16,300
23,700
570,100
558,300
427,000
446,000
Brazil
US
Mexico
TOTAL
471,400
Steady import demand in Asia
Demand for beef was particularly strong during 2011 and into 2012 in Hong Kong/China.
Shipments of beef from Australia, Brazil and the US amounted to 124,400 tonnes for the first
nine months of 2012. Demand for beef from South Korea during 2011 was excellent because
of shortages of pig meat (following the FMD outbreak). However, looking at the first nine
months of 2012, exports will be back for the full year, reflecting a significant downturn in 2012
due to increased availability of pig meat. The largest importer in Asia, Japan, showed declining
imports during 2011 and into 2012, as consumers traded down to cheaper cuts, with the
economy still in recovery mode following the tsunami.
Asian imports from key exporters, 2011 (Jan-Dec)-12 (Jan-Sept)
Australia 11 Australia 12 Brazil 11
Brazil 12
United States 11
United States 12
Japan
350,000
233,800
139,000
110,000
South
Korea
162,000
93,000
136,000
83,600
China/HK
26,000
16,300
44,000
40,800
Taiwan
38,000
29,400
33,000
9,900
Indonesia
43,000
19,300
5,000
N/a
Vietnam
1,000
n/a
43,000
35,800
Philippines
24,000
17,400
8,000
3,500
7,000
5,100
Singapore
13,000
12,700
5,000
4,000
Malaysia
15,000
11,500
77,000
67,300
1,000
N/a
14
Lower import demand in some Middle East/North African markets
Import demand has fallen in the region on the back of political problems combined with
higher import tariffs. Egyptian imports fell considerably in 2011, although some recovery is
taking place in 2012. Trade with Iran has virtually collapsed in 2012, with adverse implications
for Brazil.
Import demand has been steady in the Gulf States of the Middle East and Israel. However,
trade with Turkey has slowed reflecting higher import tariffs. In the first half of 2012, Turkish
imports were down 79% on a year earlier at 16,600 tonnes, with Poland accounting for 98% of
the total.
Middle East & North African imports from key exporters, 2011 (Jan-Dec)-12 (Jan-July)
Argentina
Australia
Brazil
EU-27
US
Total 2011
Total 2012
(Jan-July)
Egypt
2,000
97,000
Iran
2,000
131,000
Turkey
Israel
34,000
112,000
24,000
16,000
133,000
123,300
133,000
46,900
112,000
31,800
40,000
33,900
Saudi Arabia
6,000
28,000
5,000
39,000
34,600
UAE
7,000
8,000
8,000
23,000
17,700
Lebanon
2,000
15,000
1,000
18,000
11,600
Jordan
6,000
6,000
1,000
13,000
13,800
Kuwait
4,000
4,000
4,000
12,000
8,700
EU Beef Market Developments
Overall EU Market
Beef production in sharp decline
For 2012, EU-27 output is expected to fall by over 5% to around 7.7 million tonnes. Most of
the year on year decline has taken place in the first half year, with male beef supplies
declining the furthest. Some increase in cow beef output is anticipated for the remainder of
the year, due to increasing feed costs and fodder shortages. Amongst the key EU producers,
output in Italy, the UK and France is expected to fall the furthest, with output 3%, 5% and 5%
lower, respectively.
Some further slight decline in beef production is forecast by the EU commission for 2013.
EU-27 Beef and Veal Balance
Net production
Imports
Exports
Consumption
Per capita (kg)
2009
2010
2011
2012
2013
7,923
8,124
8,050
7,661
7,626
359
91
320
255
287
331
268
190
290
175
8,190
16.4
8,188
16.3
8,006
15.9
7,740
15.3
7,741
15.3
Source: EU Short Term Outlook, September 2012
15
Weaker consumer demand
Demand is being hampered by austerity measures, while higher beef prices have led to
switching to alternative cheaper protein sources. Consumption fell by over 2% in 2011, with a
3% fall expected in 2012, before stabilising in 2013. Consumption in both Italy and Spain
during 2012 has fallen by 3% and 2%, respectively. This pattern of decline is expected to ease
during 2013, with consumption forecast to fall by 2% in Italy and 1% in Spain. Consumption is
expected to fall by 1% on the French market next year, with the German and Swedish markets
the only markets forecasting growth in consumption. .
EU Import volumes decline
EU chilled and frozen imports were down 10% in 2011, and have fallen further during 2012,
given weaker EU demand relative to other global markets, and the fall in the euro against the
US dollar.
Although Brazilian shipments to the EU have been recovering, the opposite has been the case
for Argentina and Uruguay. These three countries account for 70% of EU imports. Between
them, shipments to the EU
EU-27 beef imports, tonnes pw
are down by 6% to 132,000
600,000
tonnes for the first nine
500,000
months of 2012. Imports
400,000
of beef for 2013 should
300,000
remain well below historical
200,000
100,000
levels.
EU Exports also in decline
0
2011 was very strong for
EU exporters in response to
Turkish import tariffs been
lowered, with shipments of
beef to that market reaching almost 101,200 tonnes. However, trade started to ease once
tariffs were raised in the second half of 2011. Shipments of beef to Turkey have slowed by
almost 69% to 31,800 tonnes for the first nine months of 2012.
Trade with Russia has continued the downward trend from 2011, with shipments in the first
nine months of 2012 (down 33%), with the only market showing steady growth since 2011
being Norway to become the third largest market for the EU in the first nine months of 2012,
with shipments doubling to 12,100 tonnes.
16
European prices
450
The weighted EU-15 R3
male price increased by
11% to €3.87/kg during
2012 compared to prior
year levels, reflecting
the impact of significant
tightening in supplies
and
lower
import
supplies.
Weighted EU R3 male V's Irish R3 steer (c/kg dw
excel. VAT)
EU
400
350
300
Ireland
250
200
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
Jun-12
Sep-12
Dec-12
Trends by main producers
United Kingdom
Beef production now falling
In 2012, beef output has being on the back foot as prime cattle supplies are 8% lower for the
first eleven months of the year, compared to the corresponding period in 2011. The slowdown
in young bull beef production shows little signs of easing, with supplies running 9% lower for
the same period, while cow supplies were running 2% lower. For 2012, total beef output is
forecast to fall by over 5%.
Prime beef output should eventually start to edge up as 2013 progresses, with the number of
cattle less than 1 year on farms in December 2011 being largely unchanged. There was also
some increase in calf registrations at the end of 2011, and early 2012, which should benefit
production at the end of 2012 and into early 2013.
Beef imports moving up
Despite UK output being under pressure, demand for imports is being curtailed by tight Irish
cattle supplies. Shipments from most EU major suppliers have edged upwards apart from
Ireland, which was back by 13% to 187,000 tonnes for the first ten months of 2012. The
average import price for the same period rose by 13%. For the year, total imports are
expected to reach 355,000 tonnes.
With UK output expected to show little change in 2013, total import demand looks set to
increase by 3% to 366,000 tonnes, especially if sterling remains strong combined with a
greater availability of Irish supplies.
The increase in the value of sterling and lower beef output has led to lower chilled and frozen
exports during January-September 2012, which were down 23% on year earlier levels. Exports
are expected to recover somewhat in the second half of 2012 as sterling appears to have
stabilised, and the decline in beef production has slowed down. For 2013, exports are
expected to increase slightly to 141,000 tonnes.
17
Subdued consumer demand
Consumer panel data for the year ended the 25th November 2012 shows household
purchases down by around 3% on a year earlier. Beef lost market share to pork and poultry
meat. However, consumers still spent more on beef because of higher prices. All major cuts
showed a small decline, even mince, while purchases of processed beef products were also
lower.
UK Beef and Veal Balance (‘000 tonnes cwe)
2009
2010
2011
2012
2013
Net production
Prime beef
Cow Beef
833
685
145
908
741
165
938
744
191
887
703
181
892
707
179
Imports
Chilled/frozen
395
275
375
270
372
277
355
257
366
270
99
129
170
138
141
1,129
1,154
1,140
1,104
1,117
Exports
Consumption
Source: Defra
France
Beef production in decline
For the first eleven months of 2012, total output was 5% lower on year
earlier levels. Production will remain under pressure due to high feed costs, with output
expected to fall by 5% to 1.52 million tonnes for the year.
Some further reduction in beef and veal production is forecast for 2013, with production
forecast to fall by between 1-2%.
Stable beef imports in 2012
During the first ten months of 2012, French imports rose by just 1%, despite frozen beef
imports rising by 12%. Shipments from the Netherlands (mainly veal) were back by 9%. Most
of the increase in imports related to Spain, with imports rising by 21% during the period.
French beef exports were down by 19% during the first ten months of 2012, given lower
young bull beef production, reduced demand from other EU markets coupled with a virtual
closure in Turkish trade.
18
Demand easing back
Some easing in demand for beef in France was evident during the summer months. Household
purchases up to the 4th November were back 2% for beef and 5% for veal.
Some further easing is anticipated for 2013, as challenging economic conditions combined
with a further fall in availability of domestically produced beef should dampen demand.
French Beef and Veal Balance (‘000 tonnes cwe)
Net production
2009
2010
2011
2012
2013
1,505
1,558
1,597
1,517
1,502
408
271
400
284
366
311
375
275
382
275
1,643
1,674
1,652
1,617
1,609
Imports
Exports
Consumption
Source: Institut de l’Elevage
Germany
Beef production 1% lower
Output was 1% lower for the first eleven months of the year, with a decrease in young bull
and cow beef production evident. For 2012, output is forecast to fall to around 1.15 million
tonnes.
For 2013, German output is anticipated to fall by around 2% to 1.13 million tonnes. Output
will remain under pressure in response to lower stock levels. The livestock survey shows that
the number of male cattle aged between 1-2 years held on farms in May 2012 was 3.5% lower
on year earlier levels.
Imports falling in 2012
Import demand in 2012 is expected to finish up at 415,000 tonnes, which is almost 1% lower
than 2011 levels. Demand is expected to marginally fall in 2013 to 413,000 tonnes.
Consumption
German consumption remains largely stable but with some switch to cheaper cuts evident,
which has benefited cow beef, and has even taken some market share from pig meat so far in
2012. Consumption is forecast to increase modestly to 1.1 million tonnes in 2013.
Exports in decline
German fresh and frozen beef exports fell by 16% in the first nine months of 2012 to 250,200
tonnes, reflecting higher German prices. A significant fall in shipments to non EU countries
was recorded. This reflected the complete loss of the Turkish trade and a 70% fall in exports to
Russia. Trade with other EU member states was down 9% to 226,500 tonnes, with lower
shipments to the Netherlands in particular.
19
Italy
Production in decline
Italian beef output fell by 3% during the first ten months of 2012 to
809,000 tonnes, with young bull beef production down by almost 10%, which was offset
somewhat by a 7% increase in heifer output. Output is predicted to finish up the year around
3% lower at 980,000 tonnes.
For 2013, with feedlot profitability expected to remain under pressure from higher feed costs,
demand for store cattle is forecast to fall. This is predicted to lead to a further 2% reduction
in beef output for the year.
Steady fall in imports
For the first nine months of 2012, fresh and frozen beef imports fell by 5% coinciding with
French imports being 3% lower. The average import price rose by 5% to €5,170 per tonne
during the same period.
Consumer demand under pressure
Consumption is under pressure as consumers switch to cheaper cuts and alternative protein
types. This trend is expected to continue for the remainder of 2012 and into 2013.
Italian Beef and Veal Balance (‘000 tonnes cwe)
Net production
Young bull beef
Imports
Exports
Consumption
2009
2010
2011
2012
2013
1,055
612
1,075
606
1,009
555
980
505
961
480
489
140
509
175
476
177
455
162
440
150
1,404
1,409
1,308
1,273
1,251
Source: Bord Bia
Poland
Production falling
Some downswing in dairy prices last year affected Polish farm profitability. With the herd
being predominantly dairy based, this led to cow numbers falling by 3% in December 2011
compared to year earlier levels. Lower cow supplies contributed towards output running
almost 7% lower for the first 10 months of the year. Output is expected to be around 5%
lower at 361,000 tonnes for the entire year. In response to lower cow numbers being retained
at farm level, this should lead to a further reduction in beef output in the short term.
Exports in decline
During the first nine months of 2012, exports of chilled and frozen product were broadly
similar to prior year levels. Shipments to Turkey fell by 39%, with a 16% recovery in shipments
to EU member states evident. The Dutch market remains the most important for Poland, with
the market share standing at 19%. Shipments of beef to this market grew by 26% to 37,200
tonnes in 2012, with a 46% increase to 15,000 tonnes in shipments to Spain. Some decline in
20
exports was evident in key markets such as Italy (-1%) and Germany (-10%). The Polish
export price during the period was 8% higher at €3,254 per tonne, a much lower figure than
for other member states, although this partly reflects the fact that a high proportion of trade
includes bone-in cuts.
Sweden
Import demand steady
Despite domestic output falling by 7% to 86,500 tonnes during the first eight months of 2012,
import demand during the first nine months of the year increased by almost 2% which would
suggest some fall in demand. Shipments from Ireland were back by 13%, but this was offset
by an increase for the Netherlands and especially Poland (up 27%). The average import price
has increased steadily and was up 13% in the first nine months of 2012 to €5,011 per tonne
after a rise of 17% in 2011.
Netherlands
Lower beef production
For 2012, output is expected to fall by around 1% to 378,000 tonnes. Production is forecast to
fall by around 2% in 2013.
Little change in imports
Imports of fresh and frozen beef were back by 4% in the first nine months of 2012 at 248,900
tonnes. The average import price increased by 17% in 2011, and there was a further rise of
10% in the first nine months of 2012 to an average of €4,083 per tonne. Germany and Poland
are the two principal suppliers, with these counties accounting for 37% of imports. Irish
imports during the same period fell by almost 5% to 15,900 tonnes.
Spain
Beef production falling
During the first ten months of 2012, Spanish beef output fell by almost 2% to
498,000 tonnes. This trend is expected to continue for the remainder of 2012, with production
forecast to fall by 2% to 592,000 tonnes. This reflects the liquidation within the cattle herd
that occurred last year, with cow numbers 5% lower in December 2011. For 2013, output is
forecasted to some signs of setting down at 586,000 tonnes.
Beef market under pressure
Household purchases declined by almost 2% in the first half of 2012. The food service sector
has also under traded.
This has inevitably affected import demand, although it has been at least partly offset by
lower domestic production.
In the first nine months of 2012, Spanish imports were relatively stable at 85,000 tonnes pw.
Imports from Poland soared by 46% to 13,300 tonnes pw, overtaking Germany as the number
21
one exporter to Spain. The Spanish average import price was down by over 1% to €4,972
per tonne, reflecting an increased penetration of lower priced Polish beef.
Ireland
Cattle prices have continued the overall postive trend of 2011, increasing by
over 13% during 2012. However, livestock producers have
also seen feed, fertilizer and
energy costs rise significantly, with these three elements now typically making up 70% of total
costs in beef production, after purchases of stock are taken into account.
Irish prices largely exceeded the European average up to the beginning of September,
although this trend has been reversed in the last three months, as Irish prices met a seasonal
decline.
Cattle prices have remained strong across most EU markets. UK prices have increased by 19%
over the year in euro terms. The weakening of the value of the Euro against Sterling has
helped Irish exports to the UK over the past year.
Cattle Prices: Irish R3 steer vs. UK R3 steer & EU Average (cent/kg)
470
420
370
320
270
Ireland R3 steers
UK R3 steers
EU R3 males
220
Finished cattle supplies at Irish export meat plants during 2012 were 170,000 head, or 11%
lower than the same period last year. Within this, slaughterings of prime steers and heifers
were 19% and 15% lower, respectively. Throughput of young bulls has continued to rise, with
a 13% evident in 2012. Cow supplies for 2012 were 2% below prior year level’s.
Looking forward to early 2013, availability of prime steers and heifers is likely to remain tight
in comparison with previous years. However, throughput should recover gradually as we
move through the year. A recent analysis of the Department of Agriculture’s AIM database
shows a marked increase in the number of cattle aged less than 18 months on November 1st
of last year. As shown by the following table, the number of cattle between 18 and 24 months
has increased by over 114,000 head. This is principally an impact of a 5% increase in calf births
during 2011, along with a 40% decline in live exports of calves and weanlings during the same
year.
22
Trends in cattle numbers by age, November 1st 2012 (Change in head on November 2011)
120,000
103,972
100,000
Males
Females
74,238
80,000
60,000
45,719
31,438
40,000
39,790
15,561
20,000
12,351
3,543
0
-20,000
-12,885
-3,653
-12,100
-16,590
-40,000
0-6
06-12
12-18
18-24
24-30
30-36
Source: Department of Agriculture’s Animal Identification and Movements (AIM) System
Total cattle supplies at meat export plants for 2012 were equivalent to 1.4 million head. Next
year, this is likely to recover from around a range of 100,000-150,000 head. The majority of
the rise in cattle numbers is in male cattle, so the impact on factory supplies will be influenced
by producer decisions.
Young bull production may decline in view of higher grain prices prevailing Most of this
increase in output is expected to materialise in the second half of next year. For 2012,
shipments of beef from
Irish cattle throughput at export meat plants, '000
Ireland are likely to fall
head
back to around 444,000
1,800
tonnes. The UK will
1,700
remain the principal
1,600
market for Irish beef
1,500
exports, with around
1,400
52% destined to this
1,300
market.
Beef
1,200
1,100
consumption
is
1,000
estimated to have fallen
2005 2006 2007 2008 2009 2010 2011 2012 2013(f)
by around 6% to 83,000
tonnes in 2012 in
response to higher retail prices.
23
Appendices
United States beef exports Jan-Sept 2012, tonnes pw
Destination
Quantity
% increase/decrease v’s Jan-Sept 2011
Total
610,500
-12%
Canada
115,000
-14%
Japan
110,000
+4%
Mexico
90,300
-21%
South Korea
83,600
-21%
Russia
39,300
+5%
Hong Kong
40,700
+16%
Vietnam
35,800
+11%
Brazilian beef exports Jan-Oct 2012, tonnes pw
Destination
Quantity
% increase/decrease v’s Jan-Oct 2011
Total
872,000
+13%
Russia
222,700
+6%
Egypt
113,400
+47%
EU-27
87,100
+3%
Hong Kong
76,800
+35%
Venezuela
64,700
+34%
Iran
59,300
-49%
Chile
55,100
+114%
Saudi Arabia
30,400
+25%
Australian beef exports Jan-Sept 2012, tonnes pw
Destination
Quantity
% increase/decrease v’s Jan-Sept 2011
Total
715,400
-2%
Japan
233,800
-7%
US
171,00
+39%
South Korea
93,000
-22%
Taiwan
29,400
+14%
Russia
19,300
-38%
Indonesia
17,400
-2%
Philippines
17,400
-2%
Singapore
12,700
+52%
Chile
12,700
+45%
24
Argentinean beef exports Jan-Oct 2012, tonnes pw
Destination
Quantity
% increase/decrease v’s Jan-Oct 2011
Total
118,700
-20%
EU-27
34,700
-18%
Chile
22,900
+36%
Israel
19,900
-14%
Germany
19,600
-11%
Hong Kong
16,100
Unchanged
7,700
-49%
Russia
Uruguay beef exports Jan-Oct 2012, tonnes pw
Destination
Quantity
% increase/decrease v’s Jan-Oct 2011
Total
205,600
+11%
Russia
59,200
-11%
EU-27
35,00
-1%
Israel
22,300
+60%
US
20,000
+41%
Chile
15,900
+70%
China
11,200
+67%
Irish beef exports, ‘000 tonnes cwe, 2011-2012
Destination
2011
2012 (f)
Total
507
444
UK
258
231
France
52
46
Italy
45
41
Netherlands
43
36
Scandinavia
42
40
Other
32
31
Spain
12
11
2013 European Consumption Trends, ‘000 tonnes
Destination
Quantity
% change versus 12
France
1,609
-1%
Italy
1,251
-2%
UK
1,117
+1%
Germany
1,095
+0.5%
Spain
576
-1%
Netherlands
314
Unchanged
Sweden
244
+1%
25