While EU beef production is forecast to decline further in 2024 because of structural unprofitability and mounting environmental regulations, the EU pork supply is projected to rebound in 2024, said the USDA’s Foreign Agricultural Service in Europe in a semi-annual report.
SWINE HERD REBUILDING
That forecast was based on the Eurostat December census, which reported a significant expansion of the EU sow herd in 2023, the report said. The pork supply is forecast to increase in Central Europe through improved self-sufficiency.
In Western Europe, the increase could be reached by either displacing pork in the EU domestic market, building commercial stocks, or increasing sales at the global market, the FAS said.
In the short term, EU pork prices were not competitive on the world market, the report said. Nonetheless, the restructuring and improved profitability of the EU swine sector was expected to support the sector’s potential to export to third world countries.
The Eurostat December census reported an increase of the EU sow herd of 178,000 head in 2023, indicating the EU pig crop likely will recover this year.
MORE CATTLE HERD SHRINK
The EU cattle herd was expected to shrink for the eighth straight year in 2024, the FAS said. The shrinkage is most pronounced in the EU’s dairy herd, which declined significantly in France and Germany.
The main reasons for the decline are high input prices, local droughts, the spread of the bluetongue virus, the sluggish demand for beef and the continuous flow of new requirements imposed by the European Commission.
The declining supply of young animals was forecast to reduce the slaughter level as well as the export of cattle, the FAS said. With the relatively stable calf crop in Central Europe and the Balkan region, exports of live cattle from these regions were forecast to remain strong.
In 2023, lower beef production was exacerbated by lower slaughter weights, and in 2024 was anticipated to be offset by higher weights at slaughter, the USDA said. In effect, falling feed prices were expected to compensate for the lower slaughter levels this year and cause a soft landing of the declining EU beef production trend.
EU beef imports were projected to decline in 2024 because of lower food service sales, the switch to cheaper protein sources and a lower supply from the United Kingdom, the principal beef exporter to the EU, the FAS said.
With a lower domestic supply, EU beef exports also were forecast to fall in 2024, the report said. Poland was anticipated to expand its beef exports to the EU and as third country markets, with Turkey as the main destination.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $185.74 per cwt to $191.36, compared with last week’s range of $185.00 to $191.26 per cwt. FOB dressed steers, and heifers went for $290.20 per cwt to $294.74, compared with $287.48 to $294.53.
The USDA choice cutout Wednesday was up $0.22 per cwt at $313.44 while select was down $0.47 at $302.71. The choice/select spread widened to $10.73 from $10.04 with 114 loads of fabricated product and 22 loads of trimmings and grinds sold into the spot market.
The daily weighted average USDA listed wholesale price for fresh 90% lean beef was $338.11 per cwt, and 50% beef was $104.47.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.50 to $1.65 a bushel over the May corn contract, which settled at $4.39 a bushel, down $0.00 1/2.
The CME Feeder Cattle Index for the seven days ended Tuesday was $251.41 per cwt, up $0.38. This compares with Wednesday’s Mar contract settlement of $250.25, down $0.42.