‘Robust EU cow trade on back of demand for manufacturing beef’
For the first half of 2015, the EU cow trade has demonstrated some robustness on the back of firm demand for manufacturing beef, AHDB the English organisation for the English beef and sheep industry says.
This is despite the further increases in dairy cow cullings, the on-going Russian ban and falling pig meat prices, it says.
At €3.12/kg the EU average price of grade O3 cows at the end of June had moved up 17% since the turn of the year, AHDB says.
With this evolution, the EU average price has been tracking above year earlier levels since early February, and at the end of June was around 5% up year-on-year, it says.
AHDB says that the EU cow market was under some pressure in 2014 when prices were consistently lower than the year earlier and fell sharply in the autumn.
AHDB says it was largely led by developments in France, the largest cow beef market in the EU in terms of both production and consumption.
In addition, while lower demand for cow beef across the continent had been mainly confined to hindquarter cuts, the Russian ban on imports of EU agricultural products had a notable impact on some member states, it says.
Germany and Poland, for example, had previously exported modest quantities of cow beef to Russia and this trade had been increasing during the course of last year, AHDB says.
In the first four months of 2015 total cow slaughterings in the EU were up 5% year-on-year and, with the exception of Germany, there were increases in all major producing countries, especially in Poland, AHDB says.
As a result, the growth in the EU dairy herd, may be slowing down and even coming to an end and this development is already apparent in Germany, which has the largest dairy cow herd in the EU, it says.
AHDB says that the deterioration of the milk market during the course of 2014 slowed down the growth in the total dairy herd last year.
Although, in December, it was still up a fraction on the year this compared with a rise of over 1% in the year to December 2013, it says.
Despite this, breeding dairy cow numbers still expanded for the third consecutive year and were at their highest since December 2009, AHDB says.
Milk producers in some regions have been expanding in response to better milk prices and the end of milk quotas, it says.
However, according to AHDB, dairy cow cullings in recent months have still been high with the difficulties in the milk market contributing to this development.
AHDB says that prices on the key French market, which had fallen very sharply in the last three months of 2014, have steadily recovered.
By the last week of June, the O3 cow price had increased 12% since the turn of the year and there was also a marked uplift in Germany, with prices up around 30% over the same period, it says.
In euro terms UK prices have also surged, being up 18% since January and averaging around 15% up on the first six months of last year, it says.
The cow trade in the UK has in fact held up remarkably well as the demand for manufacturing beef has been robust, it says.