According to the EC’s short-term outlook report, EU beef production is forecast to fall by 3.5% in 2012, before stabilising in 2013. The EU cattle herd ‘has been continuously decreasing since 2008, at a rate of 1.1 per cent per year on average (-1.8 per cent for dairy cows)’. Despite declining consumption in response to the economic downturn (down a projected 4.4% from 2009 to 2012), ‘EU beef prices are expected to remain at record levels throughout 2012’, due to the tight supply situation.

EU beef imports are projected to fall by 5.8% in 2012, with a stabilisation in 2013. EU exports are seen as declining significantly, fully 38.4% in 2012 and a further 2% in 2013, as a result of domestic supply shortages. As a consequence the EU is once again to become a net importer of beef (+66,000 tonnes in 2012 and +70,000 tonnes in 2013), reversing recent trends (-44,000 in 2011). This in part reflects the longer-term trend towards decreasing per capita beef consumption in the EU (from 16.4 kg per capita in 2009 to 15.5 kg in 2013).

It should be noted, however, that there is a growing focus in the UK on exports of fifth quarter products to Africa. At a 2011 EBLEX conference on beef export opportunities in Africa, short-term opportunities for fifth quarter cuts to Angola were highlighted, which it was argued could eventually lead to exports of high-end cuts.

Fifth quarter cuts consist of residual products (such as heart, liver, kidneys, tongue, stomach, intestines etc.) which can represent up to 47% of the tissue mass of an animal, with so called ‘red offal’ being the edible component of these residual parts. Analysis from EBLEX suggests that developing a marketing strategy for fifth quarter products ‘could change a £100 charge per bovine animal into a £40 benefit per bovine animal’ (although this includes also the non-edible by-products).

Exports opportunities in Ghana for UK frozen beef exports were also identified, with exports more than tripling in 2011 compared to 2010.

Globally, according to the OECD–FAO Agricultural Outlook 2012–2021 report, demand for beef is rapidly growing in developing economies, driving up nominal beef prices. Input costs have also been rising sharply, both for animal feed, and fuel for transport and cold storage. Trade expansion, however, is constrained by depleted herd levels after recent high prices. Beef production is projected to increase on average 1.8% per annum over the next 10 years, with developing countries accounting for an increasing share, some 58%, by 2021.

Global beef prices are ‘projected to remain high throughout the next decade’, in real terms about 11% higher than the average for 2009–11. In real terms, beef prices are ‘at their highest levels of the past 15 to 20 years’.