EUROPEAN UNION-FACTS AND FIGURES ON FARMING.
Declining EU milk prices and relatively high carcass prices are expected to
increase slaughter this year. As a consequence, the EU cattle herd is forecast
to resume its long-term trend of contraction during 2009, according to a U.S.
Department of Agriculture attache report posted Wednesday on the Foreign
Agricultural Services Web site.
The elevated supply of pork in 2007, in combination with EC funding, boosted
EU pork exports in 2008 to a record level of 1.7 MMT. As a result of tight
margins, pork production declined in 2008 and is not expected to recover in
2009.
Executive Summary
Cattle & Beef:
Induced by the high milk and beef prices, the EU cattle herd increased during
2007 and 2008. The herd is expected to have reached its peak size by the end
of 2008. Due to reduced slaughtering and restricted imports from Brazil, EU
beef supply tightened during 2008. Despite the limited supply, EU exports
rose, fulfilling the increased demand in Russia and Switzerland. This year,
slaughtering is expected to increase as a result of declining milk prices and
relatively high carcass prices. As a consequence, the EU cattle herd is
forecast to resume its long term trend of contraction during 2009. Due to the
increased slaughtering and to a lesser extent, recovering imports, beef supply
on the EU market is expected to expand, benefitting domestic consumption. As a
result of the financial crisis, EU beef exports are expected to decline in
2009.
Swine & Pork:
During 2007 and the beginning of 2008, margins in the swine sector shrunk due
to the high feed prices and oversupply of pork. Lower pig production and
slaughtering during the course of 2008 eventually lead to higher carcass
prices. As margins are expected to increase only moderately, a recovery of
pork production is not expected in 2009. The elevated production of pork in
2007, in combination with EC funding, boosted EU pork exports in 2008 to a
record level of 1.7 MMT. With a lower supply of pork and the financial crisis
affecting demand on the main export markets, EU exports are anticipated to fall in 2009.