EU beef exports have expanded considerably in 2016 and 2017 with data for January-July this year indicating that they were at their highest over this period since 2011. In contrast, imports have been in decline so far in 2017. At the same time beef and veal production has been unchanged and so the improved net trade position has helped the EU market.
Such an improved net trade position can help improve the carcase balance for processors as imports are dominated by high value cuts, such as steaks, whereas exports are of lower value cuts. In the first seven months of 2017 the import price for fresh and frozen beef averaged €8,855 per tonne while the export price averaged just €3,396.
Exports of fresh and frozen beef in the first seven months of 2017 increased by 26% on a year earlier and up 45% on the same period of 2015. The positive position in 2017 was mainly the result of a more than doubling in trade with Hong Kong, Algeria and the Philippines. All the top ten destinations recorded increases to varying degrees with the exception of Norway. The UK is one of the smaller, but still significant exporter, accounting for 9% of the EU total in the first seven months of this year.
The reduction in fresh and frozen imports in January-July can be mainly attributed to the fall for Brazil and contrasts with the previous five years of growth for this country. The meat scare in Brazil would appear to be impacting on trade and shipments have been well below those of a year earlier other than in January. In January-July the decline amounted to 28% and in April was as much as 55% and there has been little indication of a seasonal increase in its shipments during the spring/early summer when the steak market builds-up.
The virtually unchanged level of beef and veal production so far in 2017 hides contrasting developments between the different categories. Lower dairy cow cullings have contributed to a 3% reduction in cow beef production in the first half of 2017 reflecting the considerable upturn in the milk market in the last year. The previous low milk prices had reduced demand for dairy heifer replacements and as a result heifer beef production was up 7%. Steer and young bull beef production, the largest category accounting for just over 40% of total beef and veal output, declined by 1%. Production has been slightly down in most major producing countries with the notable exception of Poland.
The outlook for the EU beef market in the second half of 2017 and 2018 is becoming clearer as Eurostat has now published the cattle census survey results for May/June 2017. It has also published slaughtering forecasts for the major producers. The outlook suggests that cattle slaughterings could edge down with a further reduction in cows and even in male cattle and only partially offset by a further, but smaller, rise for heifers. More details will be published in subsequent AHDB Beef and Lamb articles.