Decline in EU beef and sheep meat production forecast in 2021

Thursday, 22 April 2021

EU beef production fell by 1.2% in 2020. Although there was a 0.4% increase in the number of suckler cows (+48,000head), the dairy herd decreased by 1.1% (221,000 head). In 2021, another decrease in beef production (-0.9%) is expected, according to the European Commission’s short-term outlook. This is because of structural adjustments in the sector, the continuing COVID-19 measures in many EU countries and low demand from foodservice. Calculated consumption of beef declined to 10.3 kg per capita in 2020 (-2.5%), and, according to the commission, this trend may continue in 2021 by -1%. This is  despite the recovery of demand in the second half of 2021 assuming a progressive reopening of restaurants and return of tourism.

Beef exports grew by 1.8% in 2020, despite the economic downturn. Growth was especially strong to high value markets. Export growth overall is expected to continue in 2021 (+1%), constrained by limited domestic availability and economic uncertainty. Imports plummeted in 2020 (-21%), due to the drop in demand in the EU related to foodservices closure. Imports are expected to recover by only 2% in 2021 because of a gradual reopening of foodservices in many EU countries.

 

EU sheep and goat meat production increased by 2% in 2020, according to the Commission, mainly because of on-farm slaughterings in Romania. However, a drop in production of 1% is forecast for 2021. This is due to a decline in the flock during recent years, and lower on-farm slaughterings in Romania. Lower production is expected to contribute to an increase in domestic prices, although COVID-19 measures and the closure of foodservice channels continue to affect demand.

EU sheep meat exports increased by almost 3% in 2020, with higher volumes going to Switzerland and key destinations in the Middle East compensating for a decline in exports to the UK (-7%) and elsewhere. The shortage in domestic supplies, and relatively high prices for heavy lambs is expected to have a stabilising effect on exports in 2021. Imports of sheep meat fell by 7.2% in 2020. Imports from New Zealand were lower by -9% due to unfavourable weather conditions, higher shipping costs and more attractive markets in Asia. This situation is likely to continue in 2021, leading to an additional cut in imports of -3%, and with the fall in production, a drop in sheep meat availability overall by 1.6%.

Duncan Wyatt

Lead Analyst - Red Meat

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