Chicken prices
The average price of chicken in the EU is up 29% year-on-year. However, costs have been stable since early April this year, and other meats are also in this trend, suggesting that price pressures may end. Meanwhile, gas prices remain the focus of economic negotiations as the EU’s agricultural and food sector supports the new European Commission’s (EC) proposal, “Saving Gas for a Safe Winter.” EU meat production is projected to decline 0.5% for beef and 4.7% for pork this year.
Sheep and Goat Prices
However, sheep and goat production is expected to stabilize this year. The same is expected for poultry. “EU poultry production is expected to stabilize in 2022. EU chicken prices are high enough to offset high input costs and highly pathogenic avian influenza,” said the EC Summer 2022 Agriculture Report. UK-Europe is deeply intertwined. Imports of meat products are skyrocketing in the UK and there are reservations in some categories. Despite the 0.5% decline in beef production mentioned above, demand for beef remains very strong and exports are expected to increase by 4% in 2022. Exports to the UK were the most positive outliers given the size of the market, up 32% year-on-year, consolidating its position as a major buyer of EU beef.
Live animal restrictions
However, restrictions on live animal exports between the EU and the UK hampered this market, leading to a 10% decline in the first quarter of 2022. The European Commission does not expect a “smooth export” between the two markets. EU beef prices have experienced a gradual but gradual decline since May.
Pig prices
Meanwhile, new EU data show that pig herds continue to decline by 4.7% as countries across Europe record a decline in pig farms. The EC explains high input costs, environmental problems, reduced exports, and the resulting decline in African swine fever. Very volatile pig exports with China are expected to decline by 40% in 2022 as China seeks to expand domestic production.
Overview
Overall, EU pig exports are expected to decline by 9.6% in 2022, and the UK will be outliers as imports will increase by a third. Like , UK poultry demand is as strong as beef and pork, and the country will buy 25% more chicken from the EU. According to the Office for National Statistics, inflation has jumped to 9.4% and inflation continues to rise, which could result in a significant amount of food imports at prices.
Inflation in the UK has risen to a high of more than 40 years, with food prices rising 1.2% in June alone. The Nord Stream 1 pipeline is partially resuming operations, supplying Germany with Russian gas via the Baltic Sea. The EU is currently avoiding the “nightmare” scenario of a complete gas outage. Meanwhile, some moves towards reconciliation with Russia include the US refusal of tariffs on Russian fertilizers and the relaxation of EU sanctions on Russian banks to support global food trade. Some have given the market an optimistic view.
Prior to its reopening this morning, the EU’s agricultural food sector upheld the EC’s recommendation to begin distributing gas for the winter. Is winter coming? Yesterday, the European Commission announced a proposal to reduce gas consumption by 15% by next spring. The plan aims to secure supply to major industries, including the food sector.
Supporters of the proposal include Food Drink Europe, which represents 4.5 million workers in the food and beverage industry, Copa-Cogeca, a federation of EU farmers and agricultural cooperatives, and food that employs 120,000 workers. Includes processors. “Over the past year, the costs of electricity, natural gas, fertilizers, transportation fuels and external labor have increased dramatically, already having a serious impact on European farmers and the EU’s entire agricultural food sector.” Pekka emphasizes. Pesonen, Copa-Kogeka Secretary General. “These existing difficulties will be exacerbated by gas rations, further affecting food and feed availability and affordability.
Today’s communication sends a clear message to member states: give priority access to the gas supply to the agricultural food sector, right behind homes and hospitals, “he emphasizes. President Huuber Schere, a primary food processor, explains that if a facility does not have continuous access to gas, it wastes perishable raw materials and puts a strain on the availability and price of many foods. FoodDrinkEurope shares the same opinion. “Food and beverage manufacturers process agricultural ingredients in a continuous process that is incompatible with the“ stop-and-go ”approach. A disruption in gas supply can have a significant impact on the total amount of food and feed that can be produced, “said Dark Jacobs, director of the organization.
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