International Outlook for Beef & Lamb

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Blaise Moody
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1 International Outlook for Beef & Lamb 29 th March 212 Rupert Claxton GMC : December 27 1

2 Overview Global Meat Global Beef European Beef Global Sheep European Lamb Conclusions for NI GMC : December 21 2

3 Global Meat GMC : December 21 3

4 211 total meat consumption forecast downgrade due to CN PRRS. 212 recovery rate lower than historical average Poultrymeat Pigmeat Sheepmeat Beef & Veal Fig SYN-GEN World Meat Consumption, (f) Total: 236 mio t (-.1%) Total: 239 mio t (+1.2%) (+2.7%) (+2.2%) 16 (' t cwe) (-1.8%) (+1.7%) (-1.2%) (+.2%) (-1.1%) (-1.%)

5 Sharp price rise in 211 across all meats. 212 downturn in SH & PK prices returning to more normal trend levels (upward) All meat producer/wholesaler price indices, 2-212(f) (2 L.C.) Including China Based on 2 producer prices 18 price indices, constant prices SHEEPMEAT BEEF & VEAL PIGMEAT ALL POULTRY Source: GIRA GMC 211 Weighted (consumption) averages Gira 211 5

6 (Incl. China:) Meat demand was very strong in 211. Slowing down in 212 for PK & BF but not PY. Good prospects 28 Based on 2 producer prices All meat demand* index, 2-212(f) (2 L.C.) 25 Demand index, constant prices SHEEPMEAT PIGMEAT POULTRY ALL BEEF & VEAL 1 7 Source: GIRA GMC * Demand = producer/wholesale prices x total consumption Weighted (consumption) averages Gira 211 6

7 Global Beef GMC : December 21 7

8 Beef & Veal Production: -1% global 11, -.6% 12: Dramatic lack of cattle in AR, UY & BR & US & EU 212 fall Changes in Beef & Veal Production (' t cwe) 11/1 12/11 CA -11.7%/-2.3% US -.1%/-2.5% MX +1.6%/+1.4% AR -7.4%/+2.9% BR -.9%/+.9% UY -1.1%/-1.6% EU -.2%/-2.8% CEECs -4.8%/-1.1% RU -3.%/-1.3% UA -4.%/-3.7% ME/NA +2.6%/-4.9% IN +.5%/+.5% CN -1.8%/+.4% JP -4.8%/+1.5% KR +6.1%/+12.6% AU +.5%/+3.7% NZ -3.6%/+.5% ZA +12.7%/+3.6% Total -.9%/-.6% GMC Dec. 211 Synthesis 8

9 Beef & Veal Exports Growing US, EU & IN supplies from domestic surplus Figure SYN-BF 7 Beef & Veal Exporters (incl. live, ' t cwe) 9 Others NZ AU Other F.E. CN IN RU BR Others ME/NA E.U. 2 RU US AU Others Other F.E. 8 KR 6 JP 4 2 US/CA CEECs E.U. UY BR AR MX US CA Others KR JP MX US Others Africa ME/NA 2 CA 1 RU CEECs EU GMC Dec. 211 Synthesis 9

10 Cattle Producer Prices (EUR/t cwe),2-212: strong rises: reflecting tight supply, firm global demand, and weaker Figure SYN-BF 1a Cattle Producer Prices, (current EUR-ECU/t cwe) EU Male beef R3 US RU EU Cow BR AU UY AR Long term cattle prices have been uninspiring (in the developed world) Global prices have risen sharply in last ~3 years: pulled by developing world import demand GMC Dec. 211 Synthesis 1

11 Beef Trade Flows (incl. live), : Strong Beef Trade Flows (incl. live), 28 AU/NZ demand in main trade flows of RU & MENA & CN, Flows in ' t cwe >5 Net importer Net exporter GMC Dec. 211 Synthesis Red arrow: decrease forecast in n+1 Black arrow: no significant change Blue arrow: increase forecast in n+1 11

12 European Beef GMC : December 21 12

13 EU Beef Balance: declining in production despite high prices, as dairy herd shrinks 1, EU-15 EU-25 EU-27 9, 8, 7, 6, 5, 4, NET PRODUCTION ('t cwe) COMMERCIAL CONSUMPTION ('t cwe) IMPORTS Total ('t cwe) 3, EXPORTS Total ('t cwe) 2, 1, Source: Gira Meat Club EU beef exports (including live) remain strong, due Turkey & North Africa GMC : December 21

14 EU Cow Herd dominated by dairy industry EU Cow Herd Split - Dec 21 1% 8% 6% 4% 2% % Big 4 cattle countries; France, Germany, UK, Spain 65% Dairy Cows Austria Belgium/Lux Denmark Finland France Germany Greece Ireland Italy Netherlands Portugal Spain Sweden United Kingdom Cyprus Czech Republic Estonia Hungary Latvia Lithuania Malta Poland Slovakia Slovenia Bulgaria Romania Other Dairy Other Dairy 35% Suckler cows IRE dairy only shows solid growth.. Good 1 yr outlook GMC : December 21 Cow Herd (mio Hd) Cow Herd (mio Hd) Austria Belgium/Lux Denmark Finland France Germany Greece Ireland Italy Netherlands Portugal Spain Sweden United Kingdom Cyprus Czech Republic Estonia Hungary Latvia Lithuania Malta Poland Slovakia Slovenia Bulgaria Romania

15 Since 4Q1 EU Cattle prices have been strongly upward but so have input cost increases 38 EU Average Cattle Prices Heifers R3 Young Bulls R Steer R3 Cows O Jan-7 Apr-7 Jul-7 Oct-7 Jan-8 Apr-8 Jul-8 Oct-8 Jan-9 Apr-9 Jul-9 Oct-9 Jan-1 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Source: Gira based on Eurostat Steer prices driven by Irish shortfall High feed costs have made finishing less profitable than was hoped GMC : December 21

16 UK a positive year for beef as prices remain strong, but margins are still thin Suckler cow herd up in 11, but reduced by 12 due to high cull price More dairy males kept increases supply at slaughter but now being hit by high feed will have effect in 13 production! Carcass Weights -3Kg/Hd in 11; High feed cost = earlier marketing GMC : December 21

17 Ireland suffers from reduced availability 7 6 Production 5 Volume ( t cwe) Consumption Imports 1 Exports f Source: Gira 21 production peak (and live exports) led to 211decline + high prices Farmers are retaining cattle economic option! High price is discouraging to exports

18 EU IMPORTS from 3 rd Countries: 211 sees further reduction in S.Am Supply which seems likely to continue 8 Total EU meat & cattle imports (c.w.e) from 3 rd countries 7 ( t cwe) Others NZ Australia Africa USA Uruguay Argentina Brazil e 212f Small lift in 212, appealing prices in EU + increased availability from Argentina Source: Gira GMC : December 21 18

19 EU Exports to Non-EU: have Grown to MENA BUT will be supply limited in 212 Total EU meat & cattle exports (c.w.e) to 3 rd countries Others N Africa/M East Russia CEECs Exports ( t cwe) Source: e 212f GMC : December 21 19

20 EU Beef Consumption EU Beef Consumption 211 1,6 1,4 1,2 1, France Italy UK Germany Spain Netherlands Sweden Belgium/Lux Greece Romania Portugal Denmark Poland Austria Finland CZ Ireland Slovenia Bulgaria Hungary Slovakia Estonia Lithuania Latvia Cyprus Malta Volume ( t cwe) Source: Dominated by the big 4, with very different tastes Marginal movement in consumption in most countries Top 4 negative Poland increase as production improves All markets remain flat for high end beef demand GMC : December 21

21 EU Beef Consumption falls in the face of high prices & recession EU27 ave 15.9 Kg/capita kg. per capita f France Sweden Italy EU-15 United Kingdom Greece Belgium/Lux EU-25 Spain Germany Romania Poland Source: Gira Meat Club GMC : December 21

22 Global Sheep GMC : December 21 22

23 Sheepmeat Net Production by Country 2-212: recent droughts and low prices take their toll, Global supply is tight. Figure SYN-SH 2: Sheepmeat Production, (' t cwe) CN ME/NA EU AU NZ 2 IN RU ZA AR UY CEECs UA JP GMC Dec. 211 Synthesis Gira

24 Lamb Exporters Increasing from the main shippers from Oceania Fig SYN-SH 7: Lamb exporters, (excl. live, ' t cwe) 7 25 AU 4 NZ 6 35 Others Others NZ AU Others Pacific area ME/NA 3 25 Pacific area ME/NA Asia CN 2 IN ME/NA RU CEECs S.Am Asia E.U E.U. 1 US/CA US/CA GMC Dec. 211 Synthesis 24

25 Sheepmeat Trade Flows, : global trade flows continue at a diminished level Flows in ' t cwe > 2 Net importer Net exporter GMC Dec. 211 Synthesis Red arrow: decrease forecast in n+1 Black arrow: no significant change Blue arrow: increase forecast in n+1 25

26 NZ: Better spring lifts lamb supply, but ewes down 2.5% Mutton supply falls from high cull last year 5 NZ Sheepmeat Balance Summary Volume 't cwe Lamb supply up better spring Mutton supply falls Lamb Prod'n Lamb Exports Mutton Prod'n Mutton Exports Sheepmeat Consum'n Source: GMC, Dec p 212f

27 European Sheep GMC : December 21 27

28 EU Production stabilises due to higher prices consumption is niche EU Sheepmeat Balance 2-212f 16 EU15 EU25 EU27 14 CONSUMPTION 12 ' t cwe NET PRODUCTION IMPORTS 4 EXPORTS f Source: Gira GMC : December 21

29 UK continues to enjoy huge benefit of weak pound 45 4 Volume ( t cwe) Consumption Production Imports Exports 5 Flock finally shows growth 11 good lambing, prod up Low use of feed helped profits Positive attitude on farms UK BTV free without vaccination GMC : December Strong Export Pull from Weak, boosts Farm gate price in s Imports down as NZ supply reduced 212f Source: Gira Good tupping + flock expansion + good lambing (in spite of Schmallenberg) = 12 prod increase

30 France decline in flock slowing consumption turning the corner if supplied! 35 3 Volume ( t cwe) Consumption Imports Production Exports 2 21 Use of concentrates in finishing has hit margins Flock stabilising due to recoupled Ewe premium 22/hd encouraging some! Ewe flock stability BT vaccination reduced GMC : December NZ imports down in 11 Exports up but small +5% Consumption down as a result, -1.7% f Source: Gira Small production increase 12 + NZ imp up = consumption up in % but perhaps Schmallenberg effect

31 Ireland decline in flock slowed as farmers go back to farms! 9 8 Volume ( t cwe) Production Exports Consumption Imports 1 National ewe flock nearly stable in Dec census 7% of flocks under 1 hd, ave hd per flock 95 ewes Economic crisis sees farmers return to farms has stopped slide in flock numbers GMC : December f Source: Gira 11 has seen higher prices +11% Low input costs as grass based Production up as prices pull through cull ewes leads to lower rebuilding rate Exp up as demand + price remains strong Dom market loses out to export price pull

32 Conclusions for NI GMC : December 21 32

33 Conclusions for the Beef and lamb industry Global demand continues to increase for Beef & Lamb Despite current weak EU demand Tight global supply of Beef and Lamb (and mutton) is lifting global prices Emerging markets continue to keep Global demand firm, helping sustain high prices EU weak demand is exacerbated by current recession With real concerns for margins further down the supply chain But Export growth has maintained tight supply balance Lamb is an increasingly niche product, and market access in the EU must be protected, but global supply shortfall will hold prices up. Needs to be marketed as such a niche, high price but hopefully high quality, highly differentiated (and not everyday item) More positive market conditions for the NI sector than for many years Focus on good marketing for meat produced in a good way Niche marketing of sheepmeat Higher beef mince prices and intelligent high-end promotions Consolidate export gains Focus on productivity gains

34 Thank you for your attention! GMC : December 21 34

1. INTERNATIONAL OVERVIEW. 1.0 Area and population. population (1,000) area

1. INTERNATIONAL OVERVIEW. 1.0 Area and population. population (1,000) area 1.0 Area and population area population (1,000) km 2 2000 2010 2018 1 inhabitants per km 2 Belgium 30,530 10,251 10,920 11,443 375 Germany 357,380 82,212 81,777 82,952 232 Estonia 45,230 1,397 1,331 1,315