Inside Milk
'Brexit a major threat to the broiler market'
The decline in livestock numbers has had a negative impact on the price of broiler cows in the Netherlands in 2017 and 2018. But at the moment the market is fairly balanced and broiler cows are not cheaper than in other European countries. A hard Brexit could lead to a significant fall in the price of beef.
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In the coming six months, Brexit in particular will pose a threat to beef price developments, says expert Frans van Dongen of the Central Organization for the Meat Sector (COV), who specializes in European Union trade policy. "I still assume that there will be no hard Grexit. But it can go either way with people like Boris Johnson at the helm. The sale of Irish beef to the United Kingdom has more influence on beef prices than the Russia boycott ."
Van Dongen does not assume that the trade agreements concluded by the European Union with South and North American countries will significantly increase the supply of beef in the short term. This may become an important factor in the longer term. In addition to renewed deals with Canada, the United States and the Mercosur countries Brazil, Argentina, Uruguay and Paraguay, a new agreement with Australia is also in the pipeline. Also an important player on the global beef market.
Fewer slaughter cows on the hook
Since the beginning of this year, beef prices in the European Union (EU) have fallen by between 2% and 7%, depending on the segment. With the exception of the price of cows for slaughter. "With a price of €3 per kilo of slaughtered weight for a dairy cow that goes to slaughter, no one is dissatisfied at the moment." This is what Livestock & Logistics board member Derk Jan Kuenen of the cattle trade sector committee says. "In recent years, the number of slaughters per week was 15.000. This year it has fallen to 10.000. This explains the increased price of cows for slaughter in the Netherlands. Due to herd reduction in 2017 and 2018, the price of cows for slaughter had come under pressure.
Price comparison 2017
A price comparison of slaughter cow prices in Europe and the world shows that a below-average price was paid in the Netherlands in 2017. Wageningen University (WUR) reports this based on figures from the global IFCN benchmark.
In 2017, an average of approximately €1,15 per kilo of live weight was paid, based on delivered cows between O and P quality and a slaughter percentage of around 50%. In this IFCN comparison, only the cows delivered in Poland in 2017 yielded less than €1,10 per kilo of live weight. The cows delivered in Germany yielded the most in Europe in 2017.
German dairy farmers received an average of €1,50 per kilo of live weight. Outside Europe, a dairy farmer in the American state of California received the highest price at almost €1,60 per kilogram of live weight. Globally, Argentine cow meat was the cheapest in 2017 compared to other major dairy countries. A dairy farmer received just over €0,90 per kilo of live weight for the meat of the cows delivered in Argentina.