FOREIGN AGRICULTURAL SERVICE
U.S. MISSION TO THE EUROPEAN UNION

Last update:  August 29, 2008

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Livestock

Annual Report 2008

As a result of elevated beef and milk prices, EU beef production is expected to increase in 2008. This upturn in production will only partly relieve the tight supply in the EU. The EU enlargement cut off beef imports by Romania and Bulgaria, while the European Commission tightened the import requirements for Brazilian beef. This tight supply is expected to reduce exports as well as domestic consumption, but might stimulate beef cattle farming in the New Member States (NMS), and revive production in France and Ireland. In 2007, increased supply of pork and rising feed costs induced a “return of the pig cycle”. The dim market conditions intensified the restructuring of the EU pork sector, with the most significant cuts in the NMS. The resulting tight supply is expected to have a downward effect on pork exports as well as on domestic consumption. spacerGAIN Report E48094 (August 2008)
 

Semi-Annual Report 2008

Elevated beef and milk prices slowed down the contraction of the European Union (EU) cattle herd. The elevated beef prices are partly a result of restricted beef imports. During 2008, EU beef imports are even expected to decline further as the European Commission (EC) strengthened the import requirements for Brazilian beef. The limited supply of beef on the EU market is forecast to revive cattle farming in the New Member States (NMS). Increased supply of pork and rising feed costs induced a “return of the pig cycle”. Despite government support, the EU pork sector lost market share in its two most important markets, Russia and Japan. Due to these dim market conditions, EU pig and pork production is anticipated to fall during 2008. The most significant cuts are anticipated in the NMS. Competitive producers in Northwestern Europe are expected to maintain or even increase their production. spacerGAIN report E48025 (March 2008)

bullet Netherlands | Semi-Annual Report GAIN Report NL8004 (August 2008). Elevated beef and milk prices slowed down the contraction of the European Union (EU) cattle herd. The elevated beef prices are partly a result of restricted beef imports. During 2008, EU beef imports are even expected to decline further as the European Commission (EC) strengthened the import requirements for Brazilian beef. The limited supply of beef on the EU market is forecast to revive cattle farming in the New Member States (NMS). Increased supply of pork and rising feed costs induced a "return of the pig cycle". Despite government support, the EU pork sector lost market share in its two most important markets, Russia and Japan. Due to these dim market conditions, EU pig and pork production is anticipated to fall during 2008. The most significant cuts are anticipated in the NMS. Competitive producers in Northwestern Europe are expected to maintain or even increase their production.
 
bullet "Poland May Benefit from Pork Import Quota offered by Ukraine" GAIN report PL8015 (April 2008). According to Poland's Ministry of Agriculture, Ukraine has offered Poland a 25,000 MT per month quota for exports of pork. Within quota tariffs are zero. If EU export restitutions and pork begin to flow up to the limits of the quota, the restitution could equal $12.5 million each month in payments to exporters by the EU commission through Poland's Agricultural Marketing Agency (AMA). Pork exported to Ukraine must originate from Poland. This action may help the Polish pork industry with difficulties from high feed prices and the high exchange rate of the Polish zloty versus the Euro
 
bullet "EU suspends Brazil beef imports; at least temporary " GAIN report E48016 (January 2008). DG SANCO effectively suspends Brazil beef imports from January 31, 2008, as a consequence of the refusal to publish the Brazil list of eligible cattle farms. The Brazil Ministry of Agriculture, Livestock and Food Supply had put the ball in the EU camp by submitting a list ten times longer than DG SANCO had suggested and announcing a further extension. The Brazil beef export suspension is expected to last until a new FVO audit, starting February 25, 2008, returns favorable. If unfavorable, this audit will probably trigger a full EU import ban for Brazil beef. spacer
 
bullet "Netherlands | Opportunities on the EU Meat Market" GAIN report NL7032 (December 2007). Due to CAP reforms and high feed costs, EU beef, pork and poultry production is under pressure. At the same time, the European Commission is enforcing EU legislation on imports. As a consequence, sector sources anticipate higher prices and increased opportunities for high value cuts, such as from the United States.spacer
 
bullet "EC Standing Committee approves restrictions on beef imports from Brazil" GAIN report E47112 (December 2007). On December 19, 2007, the Standing Committee on the Food Chain and Animal Health (SCFCAH) approved a Commission Decision that imposes stricter traceability requirements for Brazilian beef exports to the EU after another FVO audit identified continuing deficiencies. Expectations are that these restrictions will reduce the number of eligible ranches from more than ten thousands to just a few hundred. While these restrictions will only affect raw beef imports, EU beef prices are expected to increase. EU beef exports are expected to further decrease from the loss of competitiveness, especially as competition from Brazil beef exports to the world will increase. spacer
 
bullet "Export subsidies for raw pork reinstituted" GAIN report E47104 (December 2007). On November 29, 2007, the EC reinstituted export refunds for raw pork in an attempt to support waning pork exports which result from the unfavorable €/U.S. $ exchange rate. EU pork farmers are suffering severely from high feed costs, even as EU pork prices are still at the 5-year average level. EU feed costs are the result of a poor EU grain harvest and the impossibility to import cheap feed ingredients as a result of the EU GM policy. spacer
 
bullet "U.S. Exports to the EU increasing despite EU oversupply situation" GAIN report E47102 (November 2007). U.S. pork exports to the EU are increasing strongly as they benefit from a weak dollar vis-à-vis the Euro and simplified EU quota administration rules. The paradox is that these increased exports occur in an EU pork oversupply situation and while the EC approved a scheme to temporarily remove pork from the EU market. EU pork producers are suffering from uncompetitive export conditions and high feeding costs. spacer
 
bullet The Benelux Beef Market GAIN report NL7008 (April 2007). This report describes marketing opportunities for U.S. beef in the Benelux region. FAS/The Hague estimates that U.S. beef could further penetrate the Benelux market, elevating the annual import volume from 300 MT to more than 3,000 MT.
 
bullet EU honors U.S. request to change rules on licensing for pig meat import TRQ GAIN report E35040 (March 2005): On February 25, 2005, Commission Regulation 341/2005 was published, which increased the maximum licensing quantity for the pig import TRQ into the EU from ten to twenty percent. The change to the licensing procedure was approved upon request from the U.S. Government and was implemented on March 1, 2005.
 
bullet U.S. beef faces strong competition on the European market GAIN Report E35178 (September 2005):The EU became a net beef importer in 2003. U.S. interests in increasing beef exports to this large market are growing. However, there are important hurdles that U.S. beef exports must overcome to be competitive. Market access for U.S. beef is highly restricted by the EU hormone ban and only beef from the Non-Hormone Treated Cattle (NHTC) program is eligible. U.S. beef is also facing strong competition from South-American beef exports.
 

 

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