Bord Bia Meat & Livestock Market Outlook Autumn 2014

Transcription

1 Bord Bia Meat & Livestock Market Outlook Autumn Growing the success of Irish food & horticulture

2 Bord Bia Meat & Livestock Market Outlook Market Review & Outlook for Irish Beef Difficulties within the EU Beef Market To-date in, the beef market has been very challenging. Prices paid for R3 steers by Irish meat plants have fallen by more than 10% in comparison with the same period last year. This decline is a reflection of weaker market demand, combined with a recovery in beef supplies throughout Europe. Across each of the major beef producing countries, cattle prices have deteriorated relative to 2013 levels. In the UK, prices fell sharply from the beginning of the year until recent months, when they have recovered somewhat. While the UK remains the highest priced beef market in the EU, cattle prices there continue to lag 5.5% behind this time last year. Continental European cattle prices have also declined steadily during with Irish steer prices exceeding the average Continental EU young bull price for most of the year. However, this trend has been reversed in recent weeks, with the Irish R3 steer price slipping to 3.51/kg (excl. VAT), in comparison to 3.60/kg for the Continental EU average, and 4.35/kg for R3 steers in the UK. Irish Cattle Supplies 12.5% Higher but Numbers to Tighten in 2015 Finished cattle supplies in Ireland have risen by 12.5%, or 125,000 head, to-date, in comparison with last year. All categories of cattle have experienced an increase in throughput. The number of steers has been almost 19% higher, with heifers up by 16% and young bulls 10%. Cull cows slaughterings are just 1% higher. Since average carcase weights also recovered, the overall volume of beef produced in Ireland to-date is estimated to have increased even more significantly, by 15%. 450 Producer Price Comparison: Irish R3 steer vs. UK R3 steer & Continental European R3 Young Bull (c/kg excl. VAT) UK R3 Steers 300 Ireland R3 Steers 250 Jan Feb Mar Apr May Jun Jul Aug Sep Continental European R3 Young Bull Source: Bord Bia

3 Bord Bia Meat & Livestock Market Outlook 3 Although cattle supplies are expected to continue to be strong over the coming weeks, looking ahead to late and into 2015, availability of prime cattle looks set to tighten considerably. A recent analysis of the Department of Agriculture, Food and the Marine s Animal Identification and Movement (AIM) database on the 1st of August revealed a 35,000-head increase in the number of males and beef-cross females aged between 24 and 36 months, compared to the same time last year. However, the number of these animals in the 12 to 24 month age range declined by almost 100,000 head. This is principally an impact of a 4.3% decline in calf births last year, along with a 60% increase in live exports of calves and weanlings. Taking the figures from AIM into account, overall supplies at export meat plants are likely to reach 1.65m head for the year, up from 1.5m in However, for next year, the number of cattle available for slaughter is forecast to decline by at least 100,000 head, as shown in the chart below. EU Beef Production Recovering In recent times, beef production across Europe has tended to decline consecutively each year. In 2013, the overall volume produced by the EU was estimated to have fallen by 4% to 7.4 million tonnes, which followed another significant drop of 4.8% the previous year. However, this year there has been an increase in EU beef availability, as a result of higher cattle output in several member states, including Ireland, the UK, Poland, the Netherlands and Germany. Overall beef production in Europe is expected to recover by 1.4% in, and for 2015, a rise in output of 2.3% is forecast. The growth in Europe s beef output is partly attributable to the steady rise in EU dairy cow numbers (to 23.5m.) over the past 3 years, in anticipation of quota abolition. Retention of heifers contributed to lower meat production in 2012 and 2013 as fewer females were slaughtered. Meanwhile however, calf births have been gradually increasing, leading to a higher number of finished animals available on the market in and Beef Demand Recovering in Ireland and UK On the Irish market, sales of beef through retailers have been performing very well this year, with volumes for the 12-week period to the 20th of July running 7.7% ahead of the same period in The increase may be due in part to economic recovery, and to warm, dry weather which lent itself well to barbeques. However, the recovery in domestic demand, while welcome, has had little impact on the overall beef trade, since more than 85% of Irish beef production is exported, and therefore impacted by conditions in our major export markets. The UK market accounted for 250,000 tonnes, or 53%, of Irish beef exports in During the first half of this year, the UK beef trade was impacted by higher volumes on the market. Up to July, UK domestic production increased by 2.8% while beef imports rose by 6.2%. These factors resulted in the equivalent of over 30,000 tonnes (carcase weight) of additional supplies available, and these were generally met with lacklustre demand. Irish Finished Cattle Supply Trend (F) EU Beef Production Trend 2012 (E) m 1.65m m Steers 1600 Heifers 1400 Cows 1200 Y Bulls 1000 Other % +0.8% +0.2% +2.6% (e) +1% +10% +3.1% +6% 2013 (E) 2015(F) France Italy UK Spain Netherlands Germany Ireland Portugal Source: DAFM

4 4 Bord Bia Meat & Livestock Market Outlook Over recent months, there has been a better balance within the UK market, as cattle numbers have tightened, and demand for beef has recovered somewhat. The latest retail data for Britain during the 12 weeks up to the 20th of July reveals a 3.7% uplift in the volume of beef sold. As shown by the following chart, higher sales of mince and steak have driven the increase, although volumes of burgers, roasting joints and stewing beef sold were lower than the previous year. It is anticipated that prime cattle supplies will tighten further in UK towards the year-end. The weakening in the value of the Euro against Sterling, from 0.84p last September to 0.795p currently, has made Irish beef more competitive in that market. Continental EU Markets of Growing Importance After the UK, Continental EU markets make up the vast majority of Ireland s beef exports. These destinations, which include France, Italy, the Netherlands, Sweden, Germany and Spain, collectively accounted for 214,000 tonnes, or 45%, of Irish beef exports in Exports to the Continental EU markets look set to rise significantly this year, reflecting higher Irish output and a well-supplied UK market. The estimated 15% increase in Irish production to-date is equivalent to the volume of beef which Ireland exported last year into both the French and German markets combined. These additional supplies have posed some challenges, in order to identify markets and customers. In addition to higher volumes of Irish beef, production has also increased around Europe, and consumer demand continues to be impacted by the difficult economic environment in several key markets. The latest figures available for retail beef sales in the French market show a decline of 4.0% in volume sales for the first half of this year, which coincided with an average price increase of 1.2%. A similar trend is evident in the German market, where retail sales of beef up to the end of June showed a decline of 3.1% in comparison with the equivalent period in Feedback from the Southern European markets, most notably Italy and Spain, suggests that consumer demand for beef continues to be impacted by difficult economic situation. In spite of these downbeat indications in the shortterm, Irish beef continues to enjoy a strong following among customers throughout Continental Europe. The feedback that Bord Bia continually gets from meetings with retail and foodservice buyers is that they place a real value on Irish beef, produced on Sustainable, Quality Assured farms, using grass-based production systems and dedicated beef suckler herds. In many cases, Irish beef is sold at a price premium over beef of other origins, and often over the domestic offering, on account of these points of difference. Gt. Britain % Change in Retail Sales of Beef (Volume) 12 weeks ended 20/07/ % Change in Volume Total beef Mince Frying/grilling steak -1.9 Burgers and grills -4.8 Roasting joints -5.8 Stewing beef Source: Kantar World Panel

5 Bord Bia Meat & Livestock Market Outlook Bord Bia Meat & Livestock Market Outlook 5 Live Export Outloook Live Exports Hit their Highest Level since 2010 Exports of live cattle from Ireland reached almost 186,000 head during the first 8 months of this year: an increase of 19% on 2013 levels. In fact, the number of cattle exported to-date is at its strongest level since 2010, when the highest exports of recent years were recorded (340,000 head). Based on recent activity, exports for could extend to 250,000 head by the year end. Shipments of all categories of stock have increased. Exports of calves up to 3 months of age have risen by 14% to 101,000 head. Exports of weanlings and stores aged between 4 and 21 months are collectively 14% higher than last year, at 48,000 head. Meanwhile, the number of adult or finished cattle exported has gone up by more than 40%, at almost 37,000 head. Exports to most of the principal markets have experienced an uplift in comparison with last year. Consignments of cattle to Northern Ireland have risen by more than 8% to-date, which reflects higher movements of dairy stock: cows and in-calf heifers. However, the traditional trade in stores and finished cattle has been slower, on account of limited demand for beef coming from cattle of mixed origin. Exports to Britain have increased by more than 50% and these were also dominated by dairy breeding cattle, along with some stores for further feeding. Exports to Italy Recovering Strongly Irish exports to the Italian market of high quality suckler weanlings have recovered strongly in comparison with recent years. Most recently, weekly exports to Italy of more than 1,400 cattle are being consistently Live Cattle Exports for January - September period Distribution of Live Exports to Main Markets up to September 1st 300, , , , ,000 50,000 Adult Weanlings & Stores Calves 2013 % change Total 156, , % N. Ireland 27,315 29, % G. Britain 6,562 10, % Italy 16,851 22, % Spain 34,057 42, % Int. Markets 12,701 15, % Netherlands 30,778 37, % Source: Bord Bia and DAFM Belgium 19,337 20,933 +8% Source: Bord Bia

6 6 Bord Bia Meat & Livestock Market Outlook recorded, which is a good indication for the upcoming autumn weanling sales. Italian feedlot owners have a preference for well-shaped young cattle with the potential to put on weight quickly without laying down fat. For most feedlots the ideal arrival weight is between 340 and 420kg for bulls and between 300 and 380kg for heifers. Although Italian beef prices remain below last year s levels, finishers there are more optimistic in restocking because lower feed prices have greatly relieved their production costs. Of the 1.2 million cattle imported annually into Italy, approximately 75% come from France. The French have far lower transport costs than for Irish weanlings and their purebred stock have a reputation for consistency and uniformity. However, the high-end animals being exported from Ireland are becoming more popular because of their superior performance and high health status. As shown by the graph below, French weanling prices have remained strong throughout the year, and this factor should also strengthen the demand for Irish animals over the coming months. Live exports of Irish cattle to Spain have increased by 26% to-date, reaching almost 43,000 head. Earlier in the year, exports mostly consisted of male Friesian calves which are fed intensively in feedlots to finish as young bulls at months of age. In recent months, Spanish buyers have shown interest in Irish weanlings again, and are expected to compete for the lighter R grade continental bulls and heifers. Calf exports to the Netherlands and Belgium also performed very well earlier in the year, with numbers shipped increasing by 23% and 8%, respectively. Bord Bia Promoting Irish Livestock Live exports represent an important source of competition alongside the processing sector, as well as a valuable market outlet for the different categories of stock. Bord Bia actively supports the development of the live export trade through the provision of market information and targeted promotional activities. This year, Bord Bia conducted an advertising campaign in relevant agri-publications across the key markets for Irish calves and weanlings, in order to grow awareness. Meanwhile, promotional brochures and DVD s were circulated to potential buyers to encourage them to purchase from Ireland. Several new customers were identified, who had not previously bought Irish cattle, and these were invited to Ireland to visit exporters and farms. In each case, this generated new business for Irish live exports. Furthermore, a number of study visits were carried out to North African markets, generating valuable information and contacts for circulation to Irish exporters. Exports to non-eu markets have also increased by 21% on last year s levels. These relate mainly to shipments of young bulls for further feeding in Libya, followed by Tunisia and Morocco. Average Weanling Prices in Fance U grade bulls aged 6-12 mo.s, kg Limousin Charolais Jan Feb Mar Apr May Jun Jul Aug Source: Agreste

7 Bord Bia Meat & Livestock Market Outlook Bord Bia Meat & Livestock Market Outlook 7 Medium-Term Beef Outloook DEMAND Further growth in global meat demand anticipated The recent long term outlook produced by the OECD suggests that global demand for meat will continue to grow by 1.6% annually over the next decade as higher income levels and increasing urbanisation in developing regions boost demand for protein. This will result in an additional 58 million tonnes consumed in 2023 relative to the period. More than 80% of this growth will occur in developing countries such as Asia, South America and Africa. The rise will be led by poultry and sheepmeat but all species will see double digit growth over the period. Medium term analysis by GIRA suggests that in the period to 2019, firm import demand from Asia, as well as herd rebuilding in North America, support stronger meat prices. They also expect poultry to overtake pork to become the most consumed meat product over the period. The following pages summarise the trends anticipated for beef across the main producing and consuming regions around the world. Asia to drive beef demand Demand for beef will continue to grow in Asia with consumption expected to rise by 8% over the next five years. Prices for beef cuts are increasing in many parts of Asia with muscle cuts now valued at or above EU levels in some cases. The region offers opportunities for EU exporters over the medium term once access is secured while it will also play a key role in absorbing beef from other suppliers that traditionally would have supplied Europe. Growth Growth in in Consumption by by Meat Meat (% Change 2023 vs ) % Share of Meat of Meat Consumption Growth Pork 30% 25% 20% 15% 10% 5% 0% Poultry Sheepmeat Pork Beef Poultry 50% 29% 15% Beef 6% Sheepmeat Source: OECD/FAO Agricultural Outlook 2023

8 8 Bord Bia Meat & Livestock Market Outlook The growing importance of this region is highlighted by the fact that Chinese imports of beef showed a fourfold increase in the period Asia now accounts for more than 35% of the global beef trade compared to less than 25% in By 2019, the region is likely to account for around 45% of the global beef trade. Chinese import growth is likely to absorb much of the rise in global output, which will help to deliver a well balanced global market. The United States remains the largest consumer of beef globally and accounts for 17% of global beef imports. US output is currently depressed after two years of drought, which led to high cow culling in 2013 and followed a decade of low feedlot profitability. This has helped import volumes, especially for manufacturing beef. Over the medium term little change is expected in US demand levels with consumption likely to remain flat resulting in little change in import demand. The Middle East and Africa, which accounts for 16% of global imports, is likely to see further demand growth over the medium term but will remain price sensitive. Africa s west coast remains short of meat and needs to import increasing volumes, albeit lower value cuts. Imports into the EU have been suppressed since 2008 by supply issues in South America and from increased competition for this beef from other regions, most notably Asia. For the period to 2019, modest growth is anticipated in beef imports into the EU. Growth in volumes from traditional suppliers such as Brazil will be limited. Much of the growth in imports is likely to come from the US, Canada and Australia to fill the new quota of 50,000 tonnes for high quality beef. In terms of EU exports, the recent suspension of EU imports by Russia reduces the market options available to exporters. However, shipments to Russia from the EU stood at just 32,000 tonnes in SUPPLY Mixed trends expected in global beef output Varying trends in beef output are anticipated among the main global producers. Over the period to 2019, a rise of around 8% or 400,000 tonnes is projected in the combined export volumes of the United States, Brazil, Australia, Uruguay and Argentina. Between them these countries account for 60% of global beef exports. This level of increase is equivalent to the anticipated growth in demand in China, which highlights the positive balance anticipated in supply and demand across the leading regions. Beef Import Trends by Region Beef imports by region ('000 tonnes) % 29% Increase in global import demand of more than 1m tonnes 000 tonnes % 2% 14% (f) 2019(p) 0 Other Asia China M East/ N Africa USA EU Source: Bord Bia based on Gira

9 Bord Bia Meat & Livestock Market Outlook 9 Modest growth in US output Middle East and Asia. The reduced focus of Brazilian exporters on the EU market is expected to continue. The price response to the current shortfall in US beef supplies is likely to provide an incentive for farmers to rebuild herds over the medium term. However, any growth in output is likely to be modest with forecasts suggesting a rise of just 1% by 2019 relative to. With flat consumption and some rise in beef imports, volumes of US beef available to export are forecast to rise by at least 10%. Any increase in shipments will be largely destined for Asia with some additional volumes also expected to be targeted at Europe to fill the new high quality beef quota. Higher Brazilian exports to be focused on Asia Brazilian production continues to recover slowly from the impact of strong disposals in Conversion to a variety of arable crops constrains future production and continues to attract fertile land away from grass in the south and west. Brazilian production in 2019 is expected to be around 3% or 250,000 tonnes higher than. With further growth expected in domestic consumption, Brazilian exports are expected to increase by less than 10% between now and Any increase in shipments will be pulled into growth areas of the Lower Australian output in 2015 Australian beef production has been slowly trending-up very slightly over the last decade in an improving export climate. The peak in production recorded in reflects drought induced culling, and will result in a 200,000 tonnes fall in production in The most positive medium term outlook is for a recovery from this, led by higher prices reflecting an ongoing strong export demand. Australian exports in 2019 could stand at around 1.7 million tonnes, a rise of 10% on the levels forecast for. Limited export growth from other South American countries Recent and future beef production growth in Uruguay is limited by competition for land from the more profitable soy bean growers. Import demand growth from Asia, especially China has pulled Uruguayan beef volumes from Russia, the US and even the EU. This trend will likely continue in the medium term. Modest growth in export volumes is likely in the period to World Beef Price Comparison EU YB IRL Steer USA Steer Brazil Steer Aus Steer Source: Bord Bia

10 10 Bord Bia Meat & Livestock Market Outlook Argentina s beef sector has been negatively affected by low profitability and a difficult political environment. Current forecasts suggest exports of Argentinian beef will be around 200,000 tonnes by 2019, down by 50,000 tonnes on and 450,000 tonnes on exports recorded in Better balanced EU Market anticipated Following a rise in EU-28 output this year and next, some gradual easing in output is anticipated by 2019 to reach 7.45 million tonnes. However, the rate of decline is likely to be less than that evident over recent years as the cow herd is helped by the removal of dairy quotas. Some countries should see an increase in production, especially those with strong dairy industries such as Ireland, Netherlands and Denmark. As the eurozone economies recover, there is an improving outlook for beef demand, which will help to stabilise consumption levels. A more stable supply/ demand balance combined with some increase in import volumes will boost EU exports, which are expected to rise by 50% by 2019 to 270,000 tonnes. New export opportunities for by-products and selected cuts into specific markets are likely to be available to EU exporters over the medium term. Russia will remain short of meat despite efforts to find alternative sources as the global supply balance means that they will not be able to replace lost product from major supplying regions such as the EU and US. Export Availability Beef Export by Trends Region by Region ( 000 tonnes) % +10% (f) 2019 (p) tonnes % Export availability to rise by 400,000 tonnes % -20% 0 Brazil Australia USA Uruguay Argentina Source: Bord Bia based on Gira

11 Bord Bia Meat & Livestock Market Outlook 11 Bord Bia Meat & Livestock Market Outlook Sheep Outlook New Season Lamb Supplies Reach 6 year High Total sheep supplies for the first eight months of were running 2% higher, equivalent to an additional 45,000 head above the same period in With fewer lambs carried over from 2013, throughputs during the main hogget season were back 6% on the previous year at 734,000 head. However, in sharp contrast new season lamb supplies reached a six year high largely due to an exceptionally good lambing season and a plentiful supply of grass throughout the spring and summer months. For the period May to August total new season lamb supplies stood at 984,000, representing an 8% increase on last year. 5% increase in sheep meat production With reports of good breeding sales and brisk trade for the store lambs there is a growing sense of optimism at farm level. In line with this renewed confidence it is expected that the breeding flock will increase by 2-3% to 2.7 million. On the basis that sheep disposals continue to hold strong for the remainder of the year total throughputs for will approach the 2.7 million head. With average carcase weight rising by 1% during the year production is forecast to reach to just over 53,000 tonnes. Absence of Libya impacts on Live Trade Exports in live sheep have fallen significantly on the record highs of last year largely due to the absence of a live trade to Libya. Up until the end of July, live exports stood at 10,768 back 27,164 head, equivalent to a 72% drop year-on-year. In 2013 almost 60% of our total live exports were destined for Libya however with the growing instability in the market, live exports ceased. Looking ahead, live exports should pick up in the lead up the Muslim festival of Eid-al-Adha which falls on the 4th October. Average Sheep prices up 3% At 4.88/kg average prices for the first eight months of the year were up 3% or 15 cent. A significant part of this price gain was achieved during hogget season (Jan-April), where average prices reached 4.91/kg up Sheep Throughputs vs 2013 Source: DAFM and Bord Bia

12 12 Bord Bia Meat & Livestock Market Outlook 38c/kg on the previous year. Prices remained strong throughout May and June at a time when traditionally seasonal price adjustment normally kicks in. By early July, prices eased as weekly throughput levels both in Ireland and the UK increased. For the season to date (May mid Sept) average prices for new season lamb were marginally back by 6 cent at 4.87/kg. With the average weekly kill running 6% above 2013 levels since late August the expectation is that supplies will continue to hold strong for the remainder of the year. Given that markets continued to be subdued as consumers are cautious in their spending any imbalance in supply and demand could lead to some downward pressure on price. recent years as a knock-on effect of drought and the competition for land from other enterprises such as dairy. According to Beef and Lamb New Zealand the -15 export lamb slaughter is forecast to decrease by 3.3% to 19.5 million head. The decline reflects an increase in hoggets retained with the flock expected to show a slight recovery in the year to 30 June As confidence builds on the back of improved prices the medium term outlook is that gains in production and export availability will be directed towards Asia. It is worth noting that 2013 was the fourth successive year that New Zealand failed to fill their EU quota. Coincidentally 2013 was also the year that China became New Zealand s largest export market by value and volume. Ireland & UK buck the European decline in production Sheep meat production in the EU has been through a period of decline, with four of the largest producers (UK, Spain, France and Ireland) recording a fall in production over the last decade. However similar to Ireland production in the UK has increased over the last five years. With a 2% increase in the UK breeding flock and improved lambing rates in 2013 sheep disposals for are forecast to be up 5% on last year to million head. Combined with higher carcase weight the supply of new season lamb for the remainder of would see UK production above 300,000 tonnes for the first time since Production continues to stall in New Zealand Australia and New Zealand are clearly the dominant sheep meat exporters, representing 86% of global trade in Their export volumes have fallen in China Imposing on the Global Sheep Meat Market Demand for sheep meat has been strong in Asia and in particular in China where growth is expected to increase by 3.6% in /15. China has developed a significant appetite for sheep meat and despite it boasting the biggest sheep flock in the world demand has outpaced domestic supplies. China now accounts for some 46% of global sheep meat consumption China s sheep meat imports are primarily sourced from New Zealand and Australia, with Uruguay contributing a small share of import volumes. The volumes and values of Chinese imports have risen sharply and now account for almost 30% of global trade compared with less than 10% five years ago. Imports to China are largely frozen due to poor logistics. While China s trade in sheep meat is principally from the southern hemisphere, the Irish industry is set to gain from the ripple effect of global demand outpacing supply. Securing market access into China remains a priority focus for the industry. Average Irish Sheep Prices vs 2013/2012 Comparison of Average Sheep Prices (2012-) 600 Hogget Season New Season Lamb c/kg c/kg Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Source: DAFM

13 Bord Bia Meat & Livestock Market Outlook 13 Bord Bia Meat & Livestock Market Outlook Pigmeat & Poultry EU breeding herd and pig supplies in decline Some producers across Europe continue to downsize, destock or exit the industry following the introduction of sow welfare legislation in EU breeding sow numbers in December 2013 showed a fall of 2%. This decline has been reflected in EU pig supplies, which were down by 1% up to the end of June. To date in Irish production is running 2% ahead of last year. EU pig prices have eased in with a drop of 6% recorded year to date reflecting increased competition from other meats and a slower international demand over recent months, driven largely by the Russian suspension of imports from the EU and United States. Prices in early September were around 16% lower than the same period last year. Irish pig prices year to date are running around 1% lower at 1.63/kg dw. International pig supplies tighten After reaching record highs this summer, global pigmeat prices have eased on the back of a seasonal increase in supplies, Russian import bans and lower than expected losses resulting from the Porcine Epidemic Diarrhoea virus (PEDv). In the US, the total number of pig farms that have tested positive for PEDv stands at almost 8,200 in thirty states. Recent forecasts suggest that US production will decline by 5% in with lower numbers being partly offset by higher carcase weights. In July, US pig prices peaked at just above 2/kg dw. In Mexico, a significant number of farms have been exposed to PEDv, particularly in Northern and Central Mexico which is expected to leave output 10% lower for. PEDv is also present in Canada and if the pace of the outbreak matches that in the US, pigmeat production could begin to decline in late and through into the summer of EU Pig Production Jan June (% Change vs. 2013) EU Reference and Representative Prices ( /100kg dw excl. VAT) w/e % change vs Average to date % change vs EU Denmark Netherlands Germany Poland Denmark Spain UK Ireland France EU-28 Neth Germany -13 Italy Ireland Source: EU Commission

14 14 Bord Bia Meat & Livestock Market Outlook In Brazil, strong Russian demand has resulted in prices now running at similar levels to EU prices. Six pigmeat export plants are now approved to supply Russia, compared to just three last year. Brazilian output has been showing modest growth of less than 2% annually over recent years and this trend seems set to continue. Declining farm gate prices in China has forced some producers to reduce stock levels. Sow inventory levels recorded earlier this year stood at 48.7 million head, the lowest level seen since late According to Rabobank the continued sow liquidation should help Chinese pork prices recover from the beginning of Q4. In August, China banned six US processing plants using feed additives. Import demand in Japan has increased significantly in reflecting the impact of PEDv since it emerged in October Imports up to the end of July were running 15% higher at 487,000 tonnes driven by increased shipments from EU suppliers and Mexico. In South Korea, sow liquidation in 2013 has boosted demand levels significantly in. The Russian pigmeat industry has been heavily impacted by the ban on EU pigmeat imports. Total pigmeat (excluding offal) imports fell by 27% to 175,000 tonnes for the first half of reflecting the absence of EU product on the market. Russian pigmeat prices are expected to rise further as domestic supplies cannot meet demand levels. Medium term outlook remains positive developing world. With some of these markets unlikely to satisfy their domestic demand, this will lead to an increased import pull from established suppliers, which should support price levels. The main beneficiaries from this opportunity are the US and EU. Projections from the latest OECD-FAO outlook suggest that Chinese and African import demand is expected to increase by 39% and 52% to 982,000 and 522,000 tonnes, respectively by Poultry The outlook for the EU broiler industry is relatively positive for the remainder of and into next year due to lower feed costs, relatively high pork and beef prices. However the implementation of special safeguard measures introduced by South Africa against certain EU countries over anti dumping fears will have some negative impact for trade until new markets are developed. South Africa has become an important export market for EU exporters (up to 15% of total export volume). The most recent EU average broiler price is over 1% lower compared to corresponding period last year at 1.93/kg dw. The EU broiler meat trade balance looks set to continue in surplus over the short to medium term reflecting stable import levels and rising exports. For the first 6 months of, EU exports have grown by over 1% with higher volumes to South Africa, Benin and the Philippines particularly evident. EU imports over this period have fallen by 5%, with Brazilian and Thai import volumes 3% and 12% lower, respectively. Imports from Thailand have fallen in response to the Japanese market reopening for their raw chicken product. The future outlook for pigmeat is for increased global demand, led by higher disposable incomes in the EU Average Broiler Price /100 kg dw Source: EU Commission

15 Bord Bia Meat & Livestock Market Outlook Bord Bia Meat & Livestock Market Outlook 15 Bord Bia Promotional Activity Chefs Irish Beef Club Following the launch of the Chefs Irish Beef Club in Italy a group of chefs on a farm visit. Top German and Swedish chefs enjoying the Clash of the Ash, Co. Kilkenny. Welcoming new member chefs to include Ashely Palmer Watts, Restaurant Dinner by Heston Blumenthal. The 5th best restaurant in the world. Sheepmeat Bord Bia hosted a farm visit for Chinese government officials. David Gillick, Irish Olympic Athlete and Winner of MasterChef Ireland promoting Quality Assured Irish lamb. In an initiative to highlight the growing importance of the Nordic markets Bord Bia hosted a producer study visit to Denmark and Sweden. Pigmeat & Poultry Ray D Arcy, Today FM announcing the winner of the Bord Bia HAMbassador Award. World s fastest omelette maker Howard Helmer from the US showcasing his culinary skills. Ella McSweeney, Ear to the Ground, David Wallace, Irish Rugby Player and Neven Maguire come together to promote Irish Quality Assured ham at Bloom.

16 Bord Bia Meat & Livestock Market Outlook Bord Bia Promotional Activity Beef Inward Customer Visit by Scandinavian buyers, Summer Chinese vice President Mr Liu Yunshan and Minister of State, Tom Hayes T.D. meet at the farm of Tom and Geraldine Short in Co. Wicklow. Launching Bord Bia s summer Irish beef campaign in Holland, which ran for 10 weeks, achieving over 20 million advertising impressions Bord Bia s promotional campaign in Holland building a preference for Irish beef based on eating quality, animal welfare and environmental sustainability. Irish beef promotion, incorporating over 4,000 retail stores across the top four German retailers Belgian TV filming in Kilkenny for a programme profiling the superior taste of Irish beef Savouring the Flavour of Irish QA Beef in a highend Paris Supermarket Premium Irish beef served to over 300 top Italian Chefs at an event in Bologna Promoting the premium premium Irish El Chef Irlandes beef brand to Spanish consumers Livestock Bord Bia undertook a trade advertising campaign promoting Irish weanlings and calves to Spanish, Dutch and Italian cattle buyers Italian livestock buyers visiting Nicholas Bergin s farm, Co. Tipperary Bord Bia, Clanwilliam Court, Lower Mount Street, Dublin 2, Ireland