The latest EU Commission Short Term Outlook for arable crop, meat and dairy markets report details a declining supply outlook for both beef and lamb in the EU.
EU beef and veal production is forecast at 7.906 million tonnes cwe for 2012, a 4% reduction on 2011 production.
A decrease in beef production and contraction in imports is forecast to leave beef prices high throughout the EU.
A sustained reduction in the cattle herd since 2008, averaging 1.1% per year, has contributed to the decrease in beef production.
Beef imports are predicted to decline 6% in 2012, with sluggish domestic demand and the weak euro contributing to the decline, despite the limited availability of beef on the domestic market.
The tight domestic supply situation will impact beef exports in 2012, with EU shipments forecast to be back 38% on 2011 levels.
As a result, the EU will return to being a net beef importer in 2012, after exports spiked in 2011.
Australian beef exports to the EU have been strong in 2012, despite the forecast decrease in EU imports, up 8% year-on-year to the end of July.
Increased access and usage of the HQB grainfed quota has led to a 27% increase in grainfed beef exports.
EU sheepmeat production is expected to remain stable, although a reduction in imports is forecast, leading to high livestock prices and contributing to a reduction in supplies for consumers.
Source: Argentine Beef Packers S.A.
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