The European Union’s beef and sheep meat sectors are grappling with a series of challenges that are expected to result in reduced production levels in 2023 and 2024.
According to the latest short-term outlook report by the Agriculture and Horticulture Development Board (AHDB), poor grass growth and elevated feed costs are among the primary factors affecting production.
Beef Sector Outlook
For the rest of 2023, the beef sector is expected to see some recovery from its lacklustre performance in the first half of the year.
Lower feed prices and higher carcase weights are anticipated to contribute to this improvement. However, the overall production for the year is still expected to decline by 3.1% compared to 2022. A smaller contraction of 1% is forecasted for 2024, contingent on the continued decrease in feed prices.
Consumer behaviour is also impacting the beef market. Per capita beef consumption is projected to drop by 3.5% as households grapple with rising living costs and potentially opt for more affordable protein sources. A further decline of 1% is expected in 2024.
On the trade front, higher domestic prices are making EU beef exports less competitive globally, affecting markets like Japan and the USA.
Despite a decrease in domestic production, EU beef imports also declined in the first half of the year. However, the European Commission predicts a 5% growth in imports for 2024 due to the EU’s high domestic prices.
Sheep Meat Sector Outlook
The EU’s sheep meat production is also facing headwinds, primarily due to environmental factors such as lower grass availability and higher feed costs.
Disease outbreaks are another concern. Production is expected to fall by 1.8% in 2023, with a smaller decline of 1% forecasted for 2024.
Despite being one of the most expensive types of red meat, sheep meat consumption is expected to remain relatively stable, with a slight increase of 0.8% in 2023. This stability is attributed to the meat’s significance in religious events throughout the year.
Export potential for sheep meat is likely to be limited for the rest of 2023 due to high prices, making it less competitive on the international stage.
Exports to key Middle Eastern countries dropped by 13% in the first half of the year, and this trend is not expected to reverse. A decline of around 10% is predicted for the year, with a slight recovery to a 6% decline in 2024.
In terms of imports, New Zealand’s competitive prices and increased production are expected to boost EU import volumes by 10% by the end of 2023, with an additional 4.5% increase anticipated for 2024.
The AHDB report emphasises the need for close monitoring of these trends, as any further economic or environmental disruptions could have far-reaching implications for the EU’s agricultural sector.
