European Union

Market Trends and Growth Potential

• New EU member per capita consumption is significantly below that of established members. Rising purchasing power in new member states will stimulate consumption toward the EU average, more than compensating for the long-term gradual decline in consumption in established member states.
• There are no indications of a revival of EU beef production, which is on the decline. Increases in consumption will be supplied by imports.
• Increased consumer wealth has contributed to shifts in consumption from beef variety meat to muscle meat. Lower demand for BVM means that domestic production should cover demand.

• U.S. beef cannot compete with South American beef on price. Nonetheless, U.S. beef is a high quality product, and a significant proportion of EU consumers are ready to pay the price required to obtain consistent, high quality beef. This high quality, high-cost segment of the market will continue to grow.
• U.S.beef is unquestionably under-represented in this segment of the market. EU consumption is more than 8,000,000 mt per year. Even if market share for the highest quality beef is only 10% of the market, it would equate to 800,000 mt.

Market Penetration

• While quantities are still limited, in 2007 U.S. beef was sold in HRI cash and carry and retail stores for the first time since 1989.
• Imports of U.S. beef in 2007 are double 2006 numbers, but still too limited to create widespread opportunity for EU consumers to test the product.

Product/Industry Image

• Consumers and importers who have tried U.S. beef recognize the quality and want access to it.
• The large majority of EU consumers have not tried U.S. beef.
• EU consumers consider the U.S. to be equivalent to the EU in veterinary and food safety matters, and better than South America.

Operating/Marketing Environment and Trade/Distribution Issues

• The EU is a highly sophisticated developed market with an extremely efficient distribution system.
• Once imported, beef can be quickly and efficiently distributed within the EU.
• The marketing of beef is gradually moving towards branded products.

Access Conditions

• EU directives on animal welfare and meat production represent considerable costs for U.S. producers
• The EU Commission is receptive to improving access to U.S. beef.
• Negotiations on access conditions continue at a slow pace.

Import and market share data is based on reported exports to the EU-27 (from GTA), and U.S. export data is from the U.S. Department of Commerce, Trade Census Bureau.

Long Term Strategy:

• Continue to strengthen relationships with approved suppliers and targeted buyers, USDA and EU policy makers and work to establish distribution links for U.S. beef and build product loyalty among target end-users through trade servicing.
• Work toward the elimination of technical and sanitary barriers and significant expansion of the Hilton quota.   USMEF will also continue to support revocation of restrictive European trade barriers, in particular, the hormone ban.
• Encourage producers and packers to become EU approved so that the supply of U.S. beef can increase.
• Build receptivity to grain-fed, marbled U.S. beef through the distribution chain and with consumers in targeted European population centers.
• Focus more on the under-utilized value cuts which will help mitigate higher U.S. beef prices. Cuts to be promoted include middle meats, round cuts and brisket.

USMEF Export Forecasts: