17 February 2015

5 minute read

Europe

Now beef volumes on the UK market are expected to be lower through 2015 and into 2016 as a result of reduced domestic production, lower imports and robust exports, according to the latest forecasts from AHDB/EBLEX.

This year will see reduced prime cattle availability, with forecasts still pointing to a decrease in beef and veal production.

Over the year, the UK suckler breeding herd has fallen by three per cent to 1.57 million, while the dairy herd has moved in the other direction growing by three per cent to 1.84 million.

The decline in the breeding herd means that supplies are down and the low calf registration in 2012 and 2013 will have an impact on supplies this year.

The challenges in the dairy sector could lead to an increase in the number of cows coming forward this year, which may impact production levels, however it is too early to ascertain a realistic picture of these developments.

British Cattle Movement Service (BCMS) figures indicate that registered calf births in 2013 showed a decrease of 81,000 head on the previous year, and this clearly signals that cattle availability will be tighter.

However, with improved productivity last year on the back of better conditions and what was then a better outlook for the dairy sector, calf registrations will have increased in 2014.

The total number of prime cattle slaughtered at UK abattoirs in 2014 increased by almost two per cent on the year, largely driven by a higher number of steers coming forward.

Speaking at the AHDB Outlook 2015 conference in London, market analyst Debbie Butcher said that there had been a shift in the slaughter mix

Steers made up over half of the prime cattle slaughter mix for the first time since 1997, while young bulls accounted for their lowest proportion of the kill since 1990, as many producers chose to castrate male calves and finish them as steers.

This pushed the slaughter profile to later in the year, as steers take a little longer to finish.

This trend is expected to continue this year, Ms Butcher said.

Looking ahead, BCMS data in October 2014 recorded significantly fewer cattle on the ground between six and 24 months of age, which inevitably means a drop off in prime cattle availability this year, with slaughterings forecast to be back slightly on the year.

As a result of the modest increase in calf registrations last year, slaughterings in 2016 are forecast to edge back up a fraction.

Carcase weights for steers and heifers in 2014 were up on the year. Combined with increased throughputs this meant that production from prime cattle increased 4 per cent, with total domestic production increasing by the same amount.

It is possible that carcase weights this year will stay at these higher levels, which could mitigate the lower throughputs to some extent.

As such, production is forecast to be back in line with slaughter numbers, falling by around two per cent on the year, with some stability following in 2016.

Cow slaughterings have been generally lower last year than in 2013, but the difficulties that the dairy industry has been experiencing saw an uplift in slaughter numbers in December.

The cow market, however is remaining quite stable she told the conference.

Import volumes this year are forecast to be below the raised levels of 2014, when they were up by five per cent, largely thanks to an 11 per cent growth in imports from Ireland.

Due to the drop in production, Irish beef exports this year are forecast to fall, which should result in some downturn in shipments to the UK.

Export volumes in 2014 were ahead of year earlier levels, having performed better as the year progressed.

The growth in exports was largely driven by an expansion in shipments to Hong Kong.

Trade in 2015 is forecast to be virtually unchanged, despite lower production, supported by firm demand for manufacturing beef.

However, the weak euro could have an impact on this.

“If sterling does tighten more against the euro, it will keep Irish beef very competitive,” said Ms Butcher. 

Across the EU, France and the Netherlands have seen an increase in production – particularly in France where they are continuing to slaughter their female cattle. But EU production is generally flat as the rise in France is offset by falls in the UK and Ireland.

The global demand for beef from the EU is expected to grow and while the Russian ban on imports has been disruptive, particularly as it was an important outlet for fats from the southern European states, other locations have soaked up the EU beef, in particular the Philippines.

Global production is flat, with Australia forecast to see a 14 per cent reduction in production, but Brazil, Argentina and India, with buffalo beef, showing increases.

Brazil is also filling the hole in the Russian imports that has been left by the ban on EU beef.

In the US with farm gate prices rocketing, the sector has nit been able to source enough manufacturing beef.

However, Ms Butcher said that a turnaround in production in the US is expected over the next three years.

Chris Harris