Highlights from EU Short-term Ag Outlook

According to the latest European Union short-term agricultural outlook, the reproductive pig inventory was down 1.7 percent in December but pork production in the first quarter of 2016 still increased by 1 percent. Growth was achieved in several member states, including Spain, France, Italy, the United Kingdom and Portugal. The European Commission expects a slowing of production growth in the second half, with annual 2016 production ending up slightly ahead of last year at 23.38 million metric tons (mt). It is important to note, however, that this follows a very large jump in 2015 production of 3.6 percent – an increase of 815,000 mt compared to 2014.

EU pork/pork variety meat exports were up 37 percent through April, including a 45 percent increase in muscle cuts. For all of 2016, the Commission forecasts muscle cut export growth at 18 percent. EU per capita pork consumption reached 32.5 kg in 2015, up almost 1 kg from 2014 as the growth in exports didn’t fully absorb the increase in production, which helps explain the EU’s persistently low prices. Consumption is expected to drop by 1.6 percent in 2016 (to 31.9 kg), then stabilize in 2017.

Driven mainly by continued restructuring following the abolition of dairy quotas, EU beef production is running 2 percent ahead of last year, with a projected full-year increase of 2.4 percent followed by another slight increase in 2017. Per capita consumption has increased correspondingly and is expected to reach 10.9 kg in 2016 – the largest since 2011 and a year-over-year increase of 1.7 percent.

EU live cattle exports – mainly to Turkey, Israel and Lebanon – are booming. Through April, exports were up 39 percent from a year ago to nearly 300,000 head, following strong growth last year. EU beef/beef variety meat exports are up 4 percent through April at 124,000 mt (beef muscle cuts totaled 67,000 mt, up 7 percent). The European Commission forecast is for an increase of 9 percent for 2016 (for beef cuts only). Following a decline in 2015, EU beef imports are expected to increase 4 percent in 2016 and another 2 percent in 2017. Through April, imports were 5 percent ahead of last year’s pace, led by growth from Brazil.