EU Outlook: Sheep and goat meat production and consumption rise slightly
Coupled income support, a tight global supply-demand situation and favourable prices for producers should support this trend. Production will remain concentrated in a few EU countries, with slaughtering in Spain, Greece, France, Ireland and Romania representing more than two thirds of total EU production in 2021. EU per capita consumption is expected to remain relatively stable by 2032 (around 1.3 kg per year). This is thanks to the diversification of meat diets and sustained consumption patterns in the EU population (due to religious tradition and migration). In general, sheep meat consumption is less sensitive to price changes and more affected by peaks in seasonal demand related to religious celebrations.
Imports fall due to high Asian demand while meat exports to Near and Middle East could rise
EU exports of live animals are expected to decline by 2032 to 45 000 t (-17.5 % compared to 2022). This is mainly due to concerns about animal welfare during long-distance transport and financial risks of certain export destinations. After 2 years of low exports due to Brexit and high domestic prices, EU meat exports are expected to catch up in 2023-2024 and reach 60 000 t by 2032 based on a consolidation and further expansion of trade with partners in the Near and Middle East. UK imports currently represent almost half of EU meat exports and should remain stable at most. There is a lot of uncertainty on the possible impact of trade agreements between the UK and Australia/New Zealand on EU exports and UK exports to the EU.
EU imports will recover in the short run and slightly decline to 125 000 t by 2032. Even though the EU is still an attractive export destination, Australia and New Zealand will focus more on Asian markets, given its easier access. While Australia should fill its EU tariff rate quotas, New Zealand’s production capacity is not expected to be able to serve both the Asian and EU markets despite productivity gains.
Prices to remain above pre-COVID level
After high prices in 2021 and 2022, EU prices are to start a downward trend but are likely to remain significantly higher than before COVID-19. A big gap between EU prices and prices in New Zealand and Australia will remain. This reflects the lower production and labour costs in these two countries. There is also less pressure from the global market on these countries than on the EU.
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