The Beef ‘Ing’ Europe, USDA Says Beef Exports Will Rise Due To East Asian Demand
United States Department of Agriculture released estimates for European Union’s beef production. On the one hand, India is believed to be world’s largest buffalo meet exporter, EU has steadily been pacing forward as the beef market giant of the world. GAIN report says, ‘In line with rising slaughter, beef production is anticipated to continue its upward trend started in 2014’. During 2015 and 2016, most of the additional supply of cow meat was absorbed by the domestic market, elevating consumption to its highest level since 2011. For 2017 and 2018, beef consumption is expected to remain flat or decline in most MS and only significantly increase in Germany and Poland. As a consequence, the additional supply and stockpiled volumes are being directed to foreign markets (see graph below). During the first half of 2017, EU beef exports picked up by 21 per cent, most notably to Hong Kong, the Philippines and Algeria. As a result, the EU is currently a net producer of beef. Exports will likely further expand in 2018 as a result of increased demand from other third world country markets. In October 2017, Taiwan will reportedly lift the ban on beef imports from the Netherlands and Sweden, imposed in 2003 as a result of bovine spongiform encephalopathy (BSE) findings. Implementation of the EU-Vietnam Free Trade Agreement is planned for the beginning of 2018 (for more information see the policy section). Vietnam could be another growth market for EU beef and veal exports.
Beef imports are expected to pick during the second half of this year.
While the EU is expanding its exports, imports are being capped by quotas. The import tariffs and fixed quotas have created a shortage of higher quality beef. In 2009, the EU reached a Memorandum of Understanding with the United States, by which a zero duty quota for 48,200 MT high quality grain fed beef was implemented. Currently, the quota is fully used but less than 40 per cent is supplied by the United States, as other producers became eligible. During the first half of 2017, EU beef imports fell by 31,000 MT (see graph below). Shipments were most significantly cut from Brazil (minus 36,000 MT) and Australia (minus 6,000 MT). In March 2017, a meat scandal broke out allegedly involving rotten meat from Brazil. The EC introduced a 100 per cent physical check and 20 per cent microbiological testing regime on all meat and poultry imports from Brazil. An audit by the Food and Veterinary Office (FVO) was conducted in the first half of May 2017. Based on the first findings of the FVO, imports from Brazil will likely pick up during the second half of the year. Based on increased domestic supply, also imports from Australia are anticipated to recover during the second half of this year and 2018.
(Line representation top to bottom for total, Russia, Turkey and others)
(Line representation top to bottom for, Total, Brazil, Argentina and others)
Slaughter will increase due to the renewal of the dairy herd and rising calf crop
During the first half of 2017, EU animal slaughter declined by 0.25 per cent. But due to the renewal of the dairy herd and the increased availability of suckling calves, EU slaughter is expected to pick up during the second half of the year. This trend is forecast to continue in 2018. Further restructuring and commercialization of the beef and dairy sector in the Central European countries reduced backyard slaughter from 841,000 head in 2015 to 686,000 head last year. In 2017, backyard slaughter is anticipated to drop to 500,000 head. On the subject of higher meet production from India, a noted Indian agriculture economist Ashok Gulati says, ‘India is a leading meet exporter as many Indians do not consume meet due to various customs’.
