Beef and lamb market update: EU production grows for beef and falls for lamb in Q1 2024

Key points:

• EU beef production has risen by 4% in the first quarter of 2024 compared to 2023
• Sheep production has fallen by 4% during the same time period
• EU reference steer price has seen relative stability in recent weeks
• EU reference sheep price has declined in recent weeks as more lambs come forward
• European consumption of beef and lamb is a mixed picture currently

Beef

European Union (EU) beef production in the first three months of 2024 has seen boosted performance compared to 2023. Considering the European Commission’s predictions of a 2% fall in production for the full year, this could suggest falling output levels later on in the year.

Production has grown by nearly 60,000 tonnes (4%) from the first quarter last year, with major increases coming from Italy and Poland. Italian beef production has increased by 25,000 tonnes from 2023 to 161,000 tonnes but remains 14% lower than levels seen in 2022. Polish beef production on the other hand continues to grow from 2022 and 2023, up 16% from last year to 159,000 tonnes. Germany, as the second largest beef producer in the EU, saw an edge of +2% (4,000 tonnes) in the year to date from 2023-24, to sit at 256,000 tonnes. France continues to be the largest producer of beef in the EU, sitting at 327,000 tonnes for the first quarter of 2024. France also experienced the largest decline in production of 8,200 tonnes from 2023.

Slaughter in the EU as a whole sat 174,000 head higher at 5.6m head in the year to date, influencing total production. EU cow slaughter has grown by 47,000 head, and heifer kill rose by just over 36,000 head from the year-to-date 2023 to 24, which would align with expectations of tightening in breeding herds. The number of cattle slaughtered in France sat 36,000 head lower in 2024 compared to 2023, marking the largest decline. Germany meanwhile saw stable slaughter levels, despite the increase in production, suggesting heavier carcase weights.

Beef production in selected EU countries (YTD Jan-Mar)

Source: European Commission

EU steer prices have seen relative stability in recent weeks following a period of declines. For the week beginning 17 June, the EU average steer price sat at the equivalent of 442p/kg, growth of 1p from the previous week. In the prior four-week period, the EU average price grew by 2.7p/kg, as the measure has grown by 3p from the beginning of the year.

Selected EU deadweight prime cattle prices (p/kg)

Source: European Commission, AHDB

Sheep meat

Sheep meat production in the EU sat at 95,000 tonnes in the first three months of 2024. This is a fall of 4,200 tonnes (4%) from the same period in 2023, with large declines in output from two of the main producers, Spain and Greece. Spanish production has been hit by impacts of continuous droughts, illustrated by its 11% fall in production from Jan-Mar year on year. Greek production has fallen a similar 13% year on year to sit at 9,900 tonnes in the year to date. Germany was the only country in the top six producers to record production growth, although minimal, of 880 tonnes. French and Irish production, as the second and third largest producers, recorded 2% declines in the year to date from last year.

Total European slaughter fell by 6% (370,000 head) year on year in the first quarter of 2023, to 6.3m head, with a 210,000 head decline in slaughter from Spain. Italy saw an annual decline of 171,000 head in the first quarter, while slaughter in Greece fell by 99,000 head. There was minimal growth in slaughter numbers in Germany, Portugal, and Romania.

EU sheep meat slaughter in select EU countries YTD (Jan-Mar)

Source: European Commission

Following on from this lower production and tighter supplies, EU sheep prices peaked in late April, with the reference price sitting at 780/kg for the week beginning 22 April. Since then, we have seen the reference price declining, as the new season lambs seem to come forward across the region. The reference price has now declined for four weeks, to end at 722.2/kg for the week beginning 17 June but remains 74p higher than the same week in 2023. Prices have fallen across the board in Ireland, France, and Spain, with large declines of 32.5p/kg in Ireland from the previous week.

Weekly EU and GB deadweight lamb prices (p/kg)

Source: European Commission, AHDB

Demand for meat in the EU

After a peak in late 2022/early 2023, inflation has been declining across Europe, though red meat consumer prices are still elevated year-on-year. In May 2024, combined lamb and goat prices were up by 6% year on year, whilst beef and veal was up by 2.3% (Eurostat, 2024).

Inflation rate for meat in the EU

Source: Eurostat

Despite meat prices remaining relatively high across Europe, industry reports suggest beef and lamb demand has been relatively resilient so far in 2024. The picture is mixed among nations however. In France for example, a 3.1% fall in beef consumption was reported by France AgriMer in January to April, in comparison to 2023. Sheep meat consumption decline was more prevalent, falling by 6.0% over this period. However, German market analysts AMI have reported a 5.5% increase in beef purchases from January to May, with pork losing some volume due to steeper price rises.

The poor weather experienced across Europe has not been positive for a stimulant in BBQ meat demand so far this year. This will be a watchpoint going forward, as well as the tourism effects from the Olympic and Paralympic games in Paris later this summer.

For 2024 as a whole, the latest European Commission forecasts expect total EU beef and lamb consumption to fall slightly against 2023, constrained by prices and supply. However, longer term, sheep meat consumption is expected to benefit from its position culturally and in religious traditions.

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