Thursday, 2 March 2017

USDA upbeat on EU beef and pork

The European Union is forecast to produce and export a record volume of red meat in 2017 according to the latest USDA review.

The review goes on to say that EU beef production is increasing due to the restructuring of the dairy sector and pork production is also on the rise due to demand from China.

Since 2013, the EU has been the biggest pork exporter in the world and this year, pork exports are expected to remain strong as new markets are being sought and found, and sales are being supported by the acknowledged quality of EU pork and a favourable currency exchange rate.

After the abolishment of the milk quotas in April 2015, milk production shifted to the most productive regions and farms and as a result of this restructuring, slaughter of dairy cattle increased in the EU.

During 2015 and 2016, significant cuts were reported in Italy, Spain, Poland, France, Romania and Germany, while Ireland and the Netherlands expanded their dairy herds.

Further restructuring of the EU dairy sector will continue and additional slaughter is expected in 2017.

As a result, beef production is forecast to increase for the fourth successive year, with most of the additional production being absorbed by the domestic EU market.

Chinese demand for pork raised EU export levels to a new record in 2016.

Foreign demand for pork buoyed carcass prices, and subsequently, average fattening margins improved allowing farmers to make up for the earlier losses in 2015.

While Chinese demand weakened in the last months of 2016 driving carcass prices down, fattening margins were still positive.

These positive market conditions are expected to further support piglet production and fattening in 2017.

The EU is likely to retain its dominant position in the Chinese market based on recognised quality and the favourable exchange rate of the Euro against the Yuan and US Dollar.

This year, the EU is forecast to reach new pork production and export records.