Stagnation in French economy impacts on beef market
It says this has continued to affect cattle and wholesale beef prices and demonstrates that the difficult beef market at present is not just confined to the Ireland and the UK.
EBLEX says the decline in demand this year has inevitably contributed to a fall in the wholesale market. Grade R cow forequarter prices at Rungis were as much as 22% lower than a year earlier from January to mid-July, with a smaller fall of 10% for hindquarters. French cow prices were equally depressed, although this should be seen in the context of exceptionally firm prices of a year earlier when demand for cow beef was at its peak. This eventually meant that the market overheated.
EBLEX outlines that the normal seasonal increase in price in the first half of the year, as happened in 2013, has been replaced by stability in the first half of 2014. As a result, the gap has widened, compared with a year earlier and by mid-July the O3 price was 11% lower than a year earlier and 7% less in the year to date.
IT says this is in line with developments in both Ireland and the UK. The young bull market has also been under pressure so far in 2014, with lower export demand contributing to this development. In the latest week the R3 price was four per cent lower than a year earlier.
The stagnation in the French economy and on-going squeeze in consumer spending, not helped by lack of consumer confidence and high unemployment, is expected to continue to have an adverse impact on the beef market and the meat market in general through to at least the end of the year.
EBLEX highlights that it is inevitable that developments in France have an impact on the EU beef and veal market as a whole as it is the largest market, both in terms of production and consumption, and is also a substantial trader.