AHDB European Market Survey
18 April 2012
AHDB European Market Survey - 13 April 2012
Irish sheep meat exports in 2011 totalled 39,000 tonnes, up 11 per cent on the year.Declining EU cattle numbers
The EU Commission has published data from
censuses taken in November and December. The
results show that overall cattle numbers declined
in most of the major beef producing countries. In
France, the top EU beef producer, the census
reported a three per cent fall in the overall number
of cattle on farm. Dairy cow numbers were down
one per cent while beef cow numbers declined
almost two per cent compared to a year earlier.
Heifer replacements were seven per cent lower,
suggesting a further decline in cow numbers can
be expected in 2013. The drought conditions
during 2011 and subsequent lack of fodder
resulted in an increase in liquidations in cow
herds. During 2011, cow slaughterings in France
were up eight per cent while heifer slaughterings were up two per cent.
The trend since 2008 towards fewer cattle in Germany continued in 2011, with total numbers down one per
cent on the year. However, dairy cow numbers were little changed, a reflection of the improved milk prices
since June 2010, resulting in a sharp expansion in milk production and hence greater retention of dairy
cows. Beef cow numbers were back three per cent. The number of heifers aged over one year was down
three per cent, which suggests a continued easing back in heifer replacement demand for breeding
purposes.
In the UK, the total number of cattle fell two per cent. There was a near three per cent decline in the dairy
breeding herd and a one per cent decline in the beef breeding herd. This decline was driven by much
higher culling rates in 2011 as a result of the record prices on offer for cull cows,
due to the shortage of manufacturing beef globally. The short term outlook remains bleak for any rebuilding of the herds, with the number of females between one and two years old down two
per cent for beef and up only one per cent for dairy.
Following the trend, cattle numbers in Spain were three per cent lower on the year. Both beef and dairy cow
numbers were well down as producers culled their herds; cow slaughterings in 2011 were up nine per cent
compared with 2010. Mirroring the situation in many Member States, profitability was under pressure given
high feed costs. The number of heifers for breeding was down by as much as 22 per cent, suggesting a
further decline in cow numbers can be expected.
In contrast to the other major beef producing countries the numbers of cattle in Italy and Ireland both
increased on the year. In Ireland the number of dairy cows recorded a three per cent increase, reflecting the
profitability of the dairy sector. However, in the face of the expanding dairy sector, the beef herd contracted
by one per cent. In Italy, there was a notable increase in beef cow numbers.
The results of the recent European forecast working group for beef suggest that production in the EU-15
region is likely to decline by two per cent in 2012, largely attributable to lower output in France, the UK and
Ireland. Production in France is forecast to decline three per cent. Assuming better grazing conditions this
year, female beef production is forecast to decline by five per cent in 2012 according to the Institut de
l’Elevage, after an estimated increase of six per cent in 2011. In the UK, as cow slaughtering return to a more
normal level, production is expected to fall four per cent. A six per cent fall is anticipated in Irish beef
production in 2012.
Strong demand drives up Irish sheep meat exports
Irish sheep meat exports in 2011 totalled 39,000 tonnes, up 11 per cent on the year. Although sheep meat
production increased one per cent during the year, the increased trade was principally driven by the tight
global supply situation which led to increased demand for Irish product.
France remained the primary destination for Irish sheep meat exports, with volumes up one per cent on the
year. The overall growth was driven by strong performance in a number of markets. Irish customs reported
an 18 per cent growth in volumes to the UK, with this market taking more than a quarter of all shipments. In
addition, there was significant growth in exports to Sweden, Germany and Belgium. These increased exports
to Northern Europe were somewhat offset by the tougher trading environment of the Southern European
market. Volumes to both Portugal and Spain fell as the economic woes of these countries resulted in
consumers turning to cheaper proteins.
While exports to other EU
Member States accounted for
most of Irish shipments, trade
with third country partners
increased. Exports to these
markets were up 58 per cent,
although volumes were a
relatively modest 1,100 tonnes.
The largest non-EU market
remained Vietnam, followed by
Switzerland and Hong Kong.

The tight global supply situation
resulted in remarkably strong
competition for available
supplies. With Ireland being an
important supplier of lamb this
resulted in farmgate prices
increasing by nine per cent on average. This increased cost of procuring product resulted in the unit value of
exports increasing seven per cent to €4,920 per tonne. When combined with the increased volume being
shipped the total value of Irish sheep meat exports was almost 19 per cent higher than in 2010 at €190
million.
Bord Bia also report that live sheep exports fell by more than half in 2011 to total only 17,000 head. This
decline came as the live export market failed to compete with the domestic processing sector and the sheep
flock underwent some rebuilding, which limited the availability of animals.
Following this strong performance, Irish exports of sheep meat are expected to experience further growth in
2012. Bord Bia currently indicate that Irish lamb supplies in the first quarter of 2012 have been almost eight
per cent ahead of 2010 levels, despite fewer lambs being imported from Northern Ireland. While adult
sheep throughputs are lower, overall supplies are five per cent higher. Further to this Bord Bia expect that
lower European production will result in ongoing firm demand for Irish sheep meat. While it is anticipated
that shipments from New Zealand will be higher in 2012, lower production in some markets, especially
France, is expected to result in the requirements for Irish product increasing.
EU weaner prices reach record high
The average price of weaners in the EU has risen steadily since October. By week ended 25 March, the
average price had reached €51.65 per head, its highest level since the expansion of the EU to 25 Member
States in 2004. The figure was more than 50 per cent higher than it was six months earlier and 24 per cent
higher than in the equivalent week a year ago.
The rapid rise in weaner prices
is partly seasonal but has been
driven by relatively strong
demand coupled with a
shortage of supply. The
supply shortage is largely due
to the three per cent reduction
in the size of the EU breeding
herd during the year to
December 2011 (see EMS
12/08). As a result, the
number of piglets and weaners
recorded in the December
Census was little changed,
despite continuing
productivity gains. Robust
demand comes partly because
some producers have switched
from breeding to finishing,
notably in Poland and
elsewhere in Eastern Europe.
In addition, expectations of
higher finished pig prices later in the year are encouraging demand, despite rising feed prices since the New
Year impacting on margins.

In percentage terms, the sharpest price increases were in Poland and Hungary, where prices were around 75
per cent higher than a year earlier. Prices in Poland are still lower than in most other major producing
Member States but the gap has narrowed significantly due to steadily increasing values since January 2011.
Germany is the largest market in the EU, with 8 million head of imported weaners to add to the output of the
EU’s second largest breeding herd. At the end of March 2012, prices here were 21 per cent higher than a
year earlier and over 60 per cent above their level in September 2011. Given the close links with the
German market, the Dutch weaner price followed a somewhat similar trend. Prices in Southern Europe have
also risen rapidly in recent months, with prices in Spain more than doubling since September 2011.
There were a few exceptions to the general pattern of price rises. Most significant was Denmark, the EU’s
largest exporter of weaners. Prices here were slightly lower than at the start of the year, although still seven
per cent higher than a year earlier. Other Scandinavian countries and the UK also experienced more modest
rises in prices in recent months. UK prices were 16 per cent higher than a year earlier, in euro terms, but
only 18 per cent above their October low-point.
Contrasting trends in Italian beef and pork imports
Italian beef and veal imports were down six per cent in 2011 as consumer demand for beef remained weak,
with cutbacks in consumer spending. Despite the overall fall, imports from the largest supplying nation,
France, were up three per cent. This was largely due to France exporting surplus young bull beef at
competitive prices given higher production in 2011. Italian young bull beef production was down eight per cent on the year in 2011, which contributed to higher cattle and beef prices and falling consumption. Beef
imports from non-EU countries were also down three per cent on the year, despite a four per cent rise in
shipments from Brazil. The unit prices of imports in euro terms was up eight per cent on the year.
Exports of Italian beef and veal were up one per cent on 2010 levels to 135,000 tonnes, largely the result of a
near doubling of trade with the Netherlands, as trade with the largest markets of France and Germany
declined.
Total live cattle imports were down two per
cent to 1.3 million head in 2011, despite a
two per cent increase in imports from France,
which accounted for 73 per cent of the total.
High feed costs have affected demand for
imported store cattle from feedlots, after
having grown strongly in 2010.
Imports of fresh and frozen pork were one per
cent higher in 2011 than in 2010. Shipments
from Germany and Spain were up eight per
cent and four per cent, respectively. In
contrast, imports from the Netherlands and
France were down seven per cent and 10 per
cent respectively. The average unit price of all
pork imports was up four per cent to €1,893
per tonne. Imports of fresh and chilled legs for
curing into hams were up three per cent on
the year to 613,000 tonnes.

Live pig imports in 2011 were up 17 per cent
to 1.1 million head. The increase was mainly
due to a 44 per cent rise in shipments from
Denmark. Weaners represented more than
two-thirds of the total , with numbers up 22
per cent. Slaughter pig imports were up four
per cent on the year.
Total Italian pig meat production was down
four per cent in 2011 on the previous year and
this contributed to a one per cent fall in
household purchases of pig meat. In January
to November 2011 household fresh pork purchases were down one per cent year on year but purchases of
more expensive processed products, including salami, increased two per cent.
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