Beef sales by EU countries to external markets were at their highest level in 2016 since the millennium, reaching 703,000t compared with 599,000t in 2015, according to data published by the EU Commission.

These figures include live cattle exports and are the carcase weight equivalent (cwe). The last time the EU exported over 700,000t was in the year 2000, but there is one striking difference now compared with then. That was the year that many countries imposed a ban on EU beef because of BSE and that ban remains in place in many countries still.

Prior to 2005, EU companies were supported by the EU to export beef to non-EU countries by a system of export refunds where businesses received payments from the EU for non-EU sales. This was abolished in 2005, resulting in a collapse of EU exports to 248,000t in 2007, one-third of the level reached seven years earlier as a result of the combined impact of BSE and ending of export refunds.

Turkey was the largest export market for Europe in 2016, growing to over 71,000t, which was a 24% increase on 2015 and an eightfold increase on 2014. The market to Turkey tends to switch on and off as it is government-controlled to protect farmer prices, with imports only allowed when cattle are extremely scarce and beef prices become over-inflated.

Ireland picked up some of this business late in 2016 when France, the main exporter to Turkey, encountered problems with bluetongue restrictions.

Hong Kong was the next most important destination for EU beef exports on 58,000t, followed by Lebanon and Israel on 47,000t and 42,000t respectively. The Philippines took 24,000t, one-third of which came from Ireland, and it continues to be a growing market though from a very low base of 2,700t in 2013.

In terms of value, exports outside the EU are usually for lower-value parts of the carcase, with the higher-value cuts consumed in the home market. However, in taking live cattle Turkey is the exception to this as illustrated by the fact that while they took 10% of total EU exports in terms of volume, this represented 25% of the total value of EU exports in 2016.

EU beef imports

In total, the EU imported 334,000t of beef in 2016, which was up marginally from 322,000t the previous year, but still less than half the total of EU beef exports. However, when compared to value, EU beef exports were worth €2.2m in 2016, while imports were valued at €2bn, reflecting that the EU imported higher-value cuts of beef while exporting lower value cuts and byproducts.

Whereas EU beef exports are spread across a large number of countries, each taking a relatively small volume, the opposite applies to EU beef imports, with three countries supplying 73% of beef imports.

Within these, Brazil is the number one supplier on 141,000t, almost three times bigger than Uruguay on 57,000t followed by Argentina on 43,000t. Australia sent 28,000t of beef to the EU in 2016, while the USA exported 21,000t of beef to the EU.

They are currently aggrieved that the 45,000t quota created in 2009 in the memorandum of understanding to end the dispute on access for hormone treated beef, has been used to the extent it has by its competitors, thereby squeezing the US out.

Comment

The year-on-year growth in EU exports since 2014 reflects how EU beef prices have converged with world market prices. These have been driven by drought in the USA and more recently Australia and over the past year a new export-orientated government in Argentina.

EU countries are also progressively getting the BSE ban removed and the strong demand for high-value steak and roasting beef in the EU requires finding a market for the lower-value parts of the carcase, including the byproducts that have little value in the EU but have significant markets in African and Asian countries. The attraction of the EU market for high-value cuts is of particular interest to the USA and Mercosur countries, hence the fear of trade deals among farmers.

It will be interesting to observe how Canada performs in data for 2017 with their 45,000 tariff-free quota under CETA. They are starting from an extremely low base in 2016 of just 425t.