4 – A declining consumption in European countries especially in France :
European global consumption of pieces of meat has been following a downward trend but the differences between countries are large.
For example, according to the data coming from the European Commission, in Italia, meat purchases declined of 4.4% during the 9 first months of 2017 in comparison to the same period of 2016 when they declined of 5.8%. In Spain, bovine meat household purchasing decreased of 4% at the first semester.
However, processed meat purchases levels remained (+0.8%).
On the contrary, in the UK, fresh or frozen beef purchases keep growing (+1.4%), thanks to grilling pieces (+6.4%) and marinated products (+7%). Frozen ready to eat dishes has also increased of 5.4%.
Beef consumption in France stands for 68% of the total meat consumption, but it has decreased regularly, especially for young generations. For economic reasons (too expensive), especially because of the 2008 economic crisis, consumption has switched to plant-origin proteins.
The increasing sensibility of occidental consumers for production and transformation conditions (animal welfare, environmental issues, new relations to nature, and need for proximity) provides guidance on their choice to reduce meat consumption.
The population ageing and health concerns are help this structural trend.
The consumer removal from the agricultural world influences consumption trends, especially by his need for transparency and information.
Insects, yeast and seaweed based products are becoming popular.
Plant-origin proteins (used as ingredients) consumption should continue to grow in the following years. Its nutritional value and particularly organic crops development are growth factors. However, its prices, often high, are limiting factors.
5 – The European beef market depends on the changes in the milk market
The beef market is linked with milk market: when milk prices are more favourable, as it is the case now, there are less dairy cows on the market.
After four years of growth, the European herd is stabilizing according to the latest Community census. The milk crisis has led to more dairy cow reforms and farmers have kept fewer heifers to restore cow herd.
The dairy herd is declining by 1% from the 2016 records. The suckler herd, half the size, remained stable.
In France, the herd of dairy cows is still declining (-0.7%) while that of suckler cows has not changed much (-0.1%) (While the French cattle herd has been growing since 2014).
6 – International agreements :
On June the 6th 2017, the European Union and Japan signed an agreement in principle on the main elements of an economic partnership agreement, the JEFTA.
This agreement will eliminate almost all customs duty. Many products are indeed, currently taxed. A staggered cut in duties has been concluded for beef, going from 38.5% to 9%.
The numerous procedures to follow on the Japanese market are also an obstacle for European exports. These procedures persuade EU exporters not to do what is necessary to obtain all the required authorizations.
This agreement will result, at the trade level, in a partial or total liberalization of trade and a substantial increase in European exports of beef to Japan.
In return, Japan will benefit from zero-rate access to the EU market for virtually all of its agricultural and food products such as beef.
The agreement between the European Union and Canada, the CETA (Comprehensive Economic Trade Agreement) entered into provisional application at the end of September 2017 but remains likely to be challenged by the possible rejection of one of the national parliaments of the EU.
Its application is expected to result in a generally limited increase in European imports of Canadian beef.
The agreement is planning to establish a specific, hormone-free beef sector in Canada for export to the European Union but without any guarantee on animal welfare, animal feed and antibiotic administration issues as growth promoters.
The European market is a benefit for Canada because it can allow the valuation of back cuts of meat-type cull cows, which are usually used for minced meat.
The lower the level of cut, the more competitive Canadian products are against European products. Imported meat could therefore be essentially high-quality rear parts, mainly for the European out-of-home catering market.
Competition should therefore increase for the parts that constitute the heart of recovery of carcasses from cull cows and heifers of meat breeds. France, where consumption mainly concerns cull cows, could be particularly affected.
At a meeting in Brussels at the end of September 2017, the European Commission proposed to the EU Member States to accept the entry of a quota of 70 000 tons of beef (and ethanol) from Mercosur hoping to expand opportunities for its cars.
The President of the European Commission, Jean-Claude Juncker, said indeed, that he wanted to “do everything” in favor of an agreement with the Mercosur trading bloc before the end of 2017.
“This will be the most important trade agreement in terms of volume. A good agreement with the Mercosur countries is eight times more than the agreement we have with Canada and four times more than the agreement we have with Japan. “
France opposes the proposal of the European Commission and the French President recalled the “need for a balanced policy between openness and protection to recreate confidence in trade” and should make proposals in this direction.
Other countries, such as Spain, are expecting a lot of this agreement.
The Commission also announced the upcoming opening of talks with two other countries where agriculture plays a major role: Australia and New Zealand.
The beef market in Europe is therefore directly linked to international trade.
The current big disturbances are causing a real shortage of meat and prices rising sharply.
The future remains uncertain for the moment.