The latest EU short-term outlook reveals a big drop of 18% in sheepmeat imports in the first half of 2021 due to the combination of increased demand in Asia – particularly China – and high shipping costs.
There was a marginal increase in production of 2.2%, which fell well short of the drop in import volumes hence the particularly strong sheepmeat price throughout 2021.
EU beef production was down 0.5% in the first half of 2021 with the main contributor to this being Ireland where output was down 40,000t or 7%.
The EU expects that higher feed costs in the second half of 2021 will encourage higher slaughtering and are forecasting that production will be down 0.95% in 2022. Consumption is expected to be down 0.6% in 2021
Beef exports from the EU were down 6% in the first half of 2021, driven mainly by a drop of 27,000t of exports to the UK combined with high prices in the EU. Exports are forecast to recover in the second half of the year, leading to an annual increase in exports of 2% followed by a 5% increase in beef exports in 2022.
On beef imports, there was a decline of 11% in the first half of 2021 due to a combination of limited supplies for trade on the world market and a still reduced demand from the catering and hospitality sector in the EU because of the pandemic. EU beef imports are forecast to recover and increase by 5% in 2022.
The EU outlook recognises pigmeat being in a “difficult situation” because of a combination of increased production and slowing in demand from China while the domestic market remained disrupted by COVID-19.
In the first half of 2021, the EU produced an extra 466,000t, an increase of 4.1% year on year. Part of this is attributable to a carryover of pigs due to COVID-19 disrupting production in 2020 and this – along with increased feed costs – leave the EU forecasting an increase in production of 1.7% for the year overall.
Even with China slowing down, exports increased by 157,000t in the first half of 2021, a14% increase while other Asian markets also posted a 14% increase at 121,000t.
Overall for 2021, the EU are forecasting a 6% in pigmeat exports followed by a further 7% increase in 2022.
The EU minus the UK remains a substantial player in global meat markets both as an importer and exporter. It is the dominant player in global pigmeat exports and has fallen behind China to be the second largest importer of sheepmeat.
On beef it remains an important (but not the largest) market for South American exporters and is also an exporter, particularly of lower-value cuts.
Irish farmers are watching anxiously to see if Brazil can resume beef exports to China because if they can’t, there will be a huge increase in Brazilian exports to the EU. On sheepmeat, the prospects remain good for Irish farmers as New Zealand exports will be primarily to China in for the remainder of this year and into 2022.
Meanwhile, pigmeat prospects will be shaped by the position in China, the EU’s largest market.