EU beef and lamb demand: how has 2021 fared so far?

By Bethan Wilkins

Beef

Overall demand for beef across Europe has been under some pressure in 2020 and this has continued into 2021. In the EU, total demand has been negatively affected by ongoing COVID-19 measures and low demand from the foodservice sector. However, demand for beef produced within Europe specifically has fared better, and recently EU cattle prices have been strengthening. This reflects strong retail sales and importantly, tight supplies of live cattle. Imported product has borne the brunt of falling demand levels, as this is more likely to be used in foodservice outlets. We’ve seen a similar trend here in Britain, where strong demand for British beef at retail level has helped push prices to exceptionally high levels, while imported volumes have fallen.

In Germany, household purchases of fresh beef were up by a substantial 14% in the first quarter of 2021, though mince volumes were more stable.

The retail growth in France has not been as strong over the same period. Note that both Germany and France imposed restrictions on eating-out in mid-March last year, so retail volumes in the latter part of Q1 2020 will have been affected by this.

Reports indicate that European beef demand typically moderates at this time of year, with rising temperatures reducing the demand for hearty beef products. Although temperatures have been unseasonably low until recently, with this now changing, beef demand on the continent may dampen. On the other hand, some reopening of catering outlets could help mitigate the potential impact of this, though this may be supportive for imported, rather than European, beef.

Sheep meat

Supply-side trends have been dominant in the European sheep meat market recently. Farmgate prices have been unusually high across the EU and in the UK, with global supplies relatively short. High prices and lack of supply would ultimately be expected to moderate overall demand levels this year. Up to now, limited foodservice outlets due to COVID-19 measures have facilitated this.

Nonetheless, so far this year, retail growth for lamb sales in France has been strong, increasing by 15% across January-March compared to a year earlier. In contrast to other meats, sheep meat retail sales in France fell last year, even with the lack of eating-out options. It seems this year there has been somewhat of a recovery in lamb demand in retail outlets, which will have also helped support the recent strong price levels.

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