Latest developments of beef production in the EU. Mark Topliff Senior Analyst AHDB Market Intelligence Brisbane June 2010

Transcription

1 Latest developments of beef production in the EU Mark Topliff Senior Analyst AHDB Market Intelligence Brisbane June 2010

2 Overview of EU cattle sector

3 Background Over 24 million dairy cows and over 12 million beef cows 60% of EU beef originates from the dairy herd Males 46% Nearly 1/3 of calves from dairy herd fattened as veal Share of cattle slaughterings Veal 10% Females 44%

4 Main EU beef producers Net production - tonnes EU m 1. France 1.5 m 2. Germany 1.2 m 3. Italy 1.1 m 4. UK 0.8 m 5. Spain 0.7 m Source: Eurostat

5 Diversity of beef production systems Grasslands 23% dairy cows 34% suckler cows 33% sheep Distribution of areas and animals per zone Nordic 4% dairy cows Grasslands and maize 11% dairy cows 3% suckler cows Crops 5% dairy cows 4% suckler cows Forage crops and livestock 26% dairy cows 18% suckler cows Crops and livestock 14% dairy cows 10% suckler cows Mountain 11% dairy cows 13% suckler cows Mediterranean 17% suckler cows 48% sheep

6 EU dairy cow herd declining, suckler herd stable Thousand head 35,000 30,000 25,000 Dairy herd 20,000 15,000 Suckler herd 10,000 5, Source: European Commission

7 Recent influences on production and supply?

8 Influences on supply and production in the EU Mid term CAP reform implementation Dairy market prospects Disease - Bluetongue Cereal market fluctuations and costs of production Farm structural issues Trade restrictions and competitiveness

9 Different implementation of Common Agriculture Policy reform FRANCE GERMANY IRELAND Partial coupling Suckler Cow and Slaughter premium + Single Farm Payment Full Decoupling + Regional Farm payment Full Decoupling + Historical Single Farm payment

10 EU Common Agricultural Policy implementation Decoupling implementation Beef Production and Suckler cows ES AT BE NMS UK GR LX IT IE FR PO NL DK FI SE DE ES FR NMS UK GR ATBE PO NL LX IT DK IE DE SE FI Full decoupling 54% beef production decoupled 41% sucklers cows decoupled Source Eurostat, agra-europe, 2004

11 Dairy market - EU average milk price Euros per 100kgs /2005 price change -4% Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Source: LTO/AHDB Market Intelligence

12 Bluetongue

13 UK Animal feed price index Index (2000 = 100) Source: Defra

14 09/05/2010 EU beef farmgate price Euros per 100 kg carcase wt Little change in real terms in last 5 years Young Bulls Steers Cows Source: Eurostat 09/01/ /05/ /09/ /01/ /05/ /09/ /01/ /05/ /09/ /01/ /05/ /09/ /01/ /05/ /09/ /01/2010

15 Costs of production in a French suckler cow and finishing system Unit = / 100 kg live weight / 100 kg Costs Factor cost Depreciation Operating costs Returns Beef market return Charolais cows finishing bulls and heifers Costs of production Returns Source French Livestock Institute

16 Structural issues Average age of farmers is high 50s Lack of new entrants/skilled labour coming into industry Low incomes has meant low investment

17 EU foreign trade declined in last 5 years 000 tonnes cwe (beef & live animals) Main import sources Brazil 35% Argentina 28% Uruguay 18% Australia 4% Exports Imports Main export markets Russia, Croatia, Switzerland, Ivory Coast Source: EU Commission

18 Impact on production and demand

19 Decline in slaughterings and production 000 tonnes production Production (left scale) 000 head slaughterings 8,500 Slaughterings (right scale) 32,000 8,000 7,500 7,000 6,500 6,000 30,000 28,000 26,000 24,000 Since 2000 Slaughterings -12% Production -4% 5,500 22,000 5, ,000 Source: EUROSTAT

20 Increasing carcase weights Kg carcase weight (all cattle) Weights increased by 8% or 19kg since 2000 Better breeding Desire to increase weight of animal and value Better beef prices = increased feed Source: EUROSTAT

21 Slow long term beef & veal production decline in France & Italy 000 tonnes cwe 1,800 1,600 1,400 1,200 1, France Germany Italy UK Spain Source: EUROSTAT

22 What about demand? Beef and veal consumption - tonnes EU m 1. France 1.6 m 2. Italy 1.4 m 3. UK 1.2 m 4. Germany 1.0 m 5. Spain 0.6 m Source: Eurostat

23 EU meat consumption dominated by pigmeat EU 15 EU 25 EU '000 t cwe Sheep Poultry Pigmeat Beef & veal Source: Eurostat

24 Per-capita consumption France Denmark Sweden Italy Ireland UK Netherlands Belgium Austria Finland Malta EU-27 Portugal Slovenia Greece Kg beef per capita Meat consumption (kg / capita) Long term decline in beef, sheepmeat consumption Total meat consumption per capita = 85 kg Pigmeat = 42 kg Beef = 17 kg Sheep Poultry Beef & veal Pigmeat

25 The next 5 years

26 Future issues for the European Union Common Agricultural Policy reform Current system survives until 2013 Input prices Rising costs Economics Returns not covering costs of production Disease Restrictions add burden and economic impact Environmental impact of beef production Emissions, carbon footprint

27 Production to decline, consumption remain stable to tonnes 9,000 Production Consumption 8,386 8,429 8,433 8,430 8,500 8,404 8,403 8,400 8,065 8,041 7,973 7,914 8,000 7,869 7,871 7,855 7,500 7,000 6,500 6,000 To 2015 Production forecast to fall largely due to dairy herd changes Consumption to remain relatively stable 5,500 5, Source: EU Commission

28 Which if any of the following actions would you personally be prepared to take in order to reduce your own CO2 emissions? Reduce meat consumption Recycle more Use lower energy light bulbs Reduce Car Mileage Increase use of public transport Reduce overseas holidays Not prepared to take any % Source: AHDB/You Gov, March 2010

29 The answer to the emissions problem Thank you for your attention! 29