According to the EU’s latest short-term outlook for the EU agricultural market, rising beef prices paid to farmers across the EU generally seem to have stopped in 2022.
Beef
The price increases of beef seen since early 2021 appear to have stopped in the last few weeks due to low global supply and improved demand after the Covid-19 blockade. Between January and March, EU beef production fell 0.8% year-on-year. However, this figure hides a significant difference between EU countries. In some countries, beef cattle inventories are declining, while in others live imports make up for this. In some countries, the number of cattle is increasing and live imports are also increasing. The report states that dairy cows “continue to replace dairy cows” in Ireland. Also note that persistently high input costs may reduce additional slaughter and carcass weight later this year. Beef production across the EU is expected to decline by 0.5% this year. In the first three months of this year, EU beef exports increased by 6% compared to the same period in 2021. Exports to some high-value markets such as Canada (up 36%) and Japan (up 61%) are currently strong. The United Kingdom is up 32%.
However, the report states that these figures are compared to the relatively weak exports of the first quarter of 2021. For the full year , EU beef exports are expected to increase by 4%, constrained by restrictions on domestic availability and relatively high domestic stock prices. EU live beef exports fell 10% in the first quarter of 2022. Trade with the United Kingdom has not yet progressed completely, but trade with Russia is clearly declining. Live beef exports are projected to decline by 8% in 2022. EU beef imports are expected to increase significantly by 15% in 2022 due to the resumption of the food service industry. Sheep Looking at the sheep sector, EU lamb prices remain at unprecedented levels.
After falling at the beginning of the year, prices reached record levels again at Easter. The main reasons for this are low domestic supply and sustainable EU demand. A significant reduction in herds limits production growth in certain EU countries, despite favorable prices. The current situation of high feed prices can lead to further slaughter and lower slaughter weight in feed-intensive production systems. Overall, production is expected to stabilize in 2022, which should contribute to sustaining domestic prices. EU mutton exports fell 11% in the first quarter of 2022 compared to the same period last year. Insufficient domestic supply; ongoing trade dispute with the United Kingdom. Also, due to the relatively high prices in the EU, export recovery in 2022 will be limited to 2% from the already low figures in 2021.
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Sheep
EU live sheep exports declined over the same period, reporting a decline in all major export destinations (except Jordan in the Middle East). EU mutton imports increased by 12% in the first quarter of 2022. Shipments from the UK to the EU showed a strong recovery of 31%, but imports from New Zealand were relatively stable. However, assuming that trade friction with the UK remains unchanged, high transportation costs in Asia and more attractive markets will limit the increase in EU imports in 2022 to 6%.
Pork
Since February 2022, EU pigmeat price has rapidly recovered. However, increasing concerns for the environment; reduced export prospects; sustained high input costs; and African swine fever (ASF) may push production down.
EU consumption of pigmeat is likely to decline by 3.3% this year.
As China continues to restore its pigmeat production capacity, EU exports to that destination returned to pre-ASF levels and are expected to decrease by 40% in 2022.
In the meanwhile, EU exports to the UK continue improving, and may almost reach their 2019 level.
Overall, EU pigmeat exports are expected to decrease by 9.6% in 2022, though this would still be 19% higher than the 2016-18 average.
EU pigmeat imports from the UK are expected to increase strongly in 2022, by 34%, and, as a result, total EU pigmeat imports are due to increase by 28% – though this would still be 21% lower than the 2016-2018 average.
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Poultry
On poultry, EU broiler price showed a strong surge by 13% in five weeks from late February to early April. Since April, it leveled off at 38% above the 2017-2021 average.
The sector is facing an avian influenza (bird flu) epidemic of “historic magnitude”. However, it’s impact on meat production is differs between countries, ranging from moderate to severe.
High input costs are also constraining production, as are growing environmental concerns and regulations.
Poultry trade with the UK is resuming pre-Brexit levels. EU exports to the UK are expected to increase by 20% in 2022, to a level 6% above the 2016-19 average.
EU poultry imports from the UK may increase by 25% in 2022, though this would still be 3% below the 2016-19 average.
Due to bird flu, EU exports are constrained due to bans in a number of countries. EU poultry exports will increase, but only by 0.9%.
The reopening of food services in the EU is likely to continue pushing poultry imports up. Overall, EU poultry imports are expected to increase by 16.5% in 2022, though this would still be 4% lower than the 2016-2019 average.
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