Beef market characteristics:
- Beef price increases in Poland (from 2021) are among the largest in the EU. According to the forecast for 2022, demand for EU beef may decrease, but intensifying cost pressures will continue to keep internal supply low and cattle prices high over the next several months (until the end of 2022 and in 2023).
- According to Eurostat, cattle slaughterings in the EU in Q1-3Q21 decreased by 0.6% y/y, of which Q3Q21 was down by 1% y/y. The decline in EU production was largely influenced by the reduction in slaughterings in Poland. In 3Q21, they fell by 4.7 per cent y/y and in total in 1-3Q21 they were 1.7 per cent lower y/y.
- The beef market is largely influenced by the situation on third markets – limited supplies by major exporters and a partial redirection of the Asian market’s attention to European beef. EU beef imports – fresh and frozen (CN 0201 and CN 0202) – decreased by 15% y/y in 3q21 (+3% y/y in 2q21) while exports increased by 4% y/y (+11% y/y in 2q21).
- Supplies declined (in 2021) from Argentina, which restricted foreign sales through higher tariffs, dampening domestic inflation, and from Australia, where cattle populations have declined significantly in the last two years (2020-21). At the same time, strong demand in Asian markets materialised in the form of increased EU exports to Japan (+258% y/y), China (+75% y/y) or the Philippines (+27% y/y).
- The reduced supply of meat on the domestic market (2021) was accompanied by a higher demand for beef in the HoReCa sector than a year ago (2020), which created upward pressure on prices.
- The deceleration of beef price increases in non-EU markets may suggest a cooling of the economy in the Union as well. The World Beef Price Index (FAO) in November 2021 was 25.5% higher y-o-y compared to over 30% growth in the previous 3 months.
Sources: https://www.farmer.pl/produkcja-zwierzeca/bydlo-i-mleko/wzrosty-cen-wolowiny-w-polsce-sa-jednymi-z-najwiekszych-w-ue,114654.html
Agro Nawigator 4/2021, https://www.pkobp.pl/media_files/bfa8030e-b39d-492a-96c8-0ec361d1a4de.pdf