According to the European Commission’s latest short-term agricultural outlook, more abundant and affordable feedgrain supplies are expected to provide relief for Europe’s livestock sector in 2014. In fact, feed prices already began to decline this summer. With producers benefiting from better margins, this will boost EU pork and beef production.
Cereal grain production (primarily wheat, but also corn and barley) is expected to increase 8 percent over last year to 304 million tons. Italy is the only large grain-producing member state in which a decline in harvest compared to last year is expected. Romania, Spain and Hungary are all expecting to see significant increases in production over last year’s drought-affected harvest. Oilseeds (mostly rapeseed, but also sunflower) are forecast up 9 percent to 29.8 million tons. This would be the EU’s highest level of grain and oilseeds production in several years, with the largest ending stocks since 2009-2010.
May-June pig inventory surveys (covering 13 member states and 90 percent of total EU production) showed numbers dropping 1.3 percent over the past year. Declining herds were seen in Germany (-1.6 percent), Spain (-2.9 percent), Denmark (-1.2 percent), France (-0.6 percent) and Italy (-6.6 percent). The Netherlands posted a steady pig inventory but breeding sows were down 2.4 percent. Germany (-5.4 percent) and Spain (-6.5 percent) saw even larger sow herd declines.
EU hog slaughter was down 1.1 percent in the first half of this year. But this was partially offset by heavier carcasses, so pork production was down only 0.6 percent. Second-half production is expected to drop more significantly, putting annual production down 1.2 percent to 22.25 million tons (following a 2 percent decline in 2012). However, pork producers have reportedly adapted to new animal welfare requirements, which is expected to halt the decline in sow numbers and modestly increase pork production in 2014.
Per capita pork consumption is expected to decline for the third year in a row, down 1.4 percent (to 30.8 kg), due to relatively tight supplies and high prices.
EU beef production was down 4.5 percent in the first half of this year, with full-year production projected to be 7.6 million tons. This would be a 2.7 percent decline from a year ago, following a 3.9 percent drop in 2012. Heifer slaughter was down 5.7 percent in the first half, indicating that producers are rebuilding herds. Total cow numbers were up 0.6 percent, with a 1.1 percent increase in dairy cows offsetting a marginal reduction in beef cows. The turnaround in the EU dairy herd is remarkable, because as it has been in decline for the past 20 years. Because high dairy prices have stimulated an increase in dairy production, more dairy calves are expected to be slaughtered for beef next year.
Beef imports into the EU are expected to increase 10.6 percent this year and 5 percent in 2014. Reflecting tight supplies and weak economic conditions, EU beef consumption is expected to fall by 1.7 percent (to 10.6 kg) this year before recovering modestly in 2014.
EU poultry production is expected to reach 12.5 million mt this year, an increase of 0.8 percent over 2012. This increase is mainly attributed to higher production in the United Kingdom (+3.6 percent) and Germany (+0.4 percent), as well as an increase in France.
The current breakdown of EU meat consumption is 49 percent pork, 30 percent poultry, 19 percent beef and 2.7 percent sheep meat. As domestic poultry production continues to grow, poultry has been capturing market share from pork and beef.