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Red meat market – forecast for Q4 2019

Red meat market – forecast for Q4 2019

The year 2019 has seen many changes in the global red meat market. The most significant changes have been brought about by an increase in imports to China, the largest sales market for pork in the world. This trend is expected to continue through the last quarter of 2019.

The situation in China has stimulated price levels both in the USA and in the EU. At the beginning of the fourth quarter, pork prices in both the EU and USA were substantially higher than one year earlier. The price of pork carcasses (weighted average of classes S-E) in the European Union in October 2019 according to Eurostat data was as much as 31.2% higher than the previous October[1], while the Lean Hog price in the USA was higher by 28.3%.

The European Commission’s long-term forecasts included in the latest Agriculture Outlook suggest that this high price level will maintain for some time. These forecasts indicate that in 2019 export of pork from the EU will grow by 20% and that in 2020 growth will continue at a level of 13%. Production is also expected to increase by 0.4% and 1.5% respectively.[2] In the USA, similar patterns are expected. According to USDA forecasts, in 2019 the export of pork from the USA is expected to grow by 12%, while in 2020 this growth is predicted to be 10.9%. Production is also expected to increase by 5.0% in 2019 and 4.0% in 2020.[3]

The beef market is also expected to see an increase in exports. In the European Union, growth of exports is predicted to amount to 8.0% in 2019 and 5.0% in 2020 in conjunction with a simultaneous drop in beef production of 0.5% in 2019 and 0.7% in 2020. Despite this drop in production and growth in exports, prices are expected to maintain at a low level due to decreasing consumption, which is expected to fall by 0.9% and 0.8% respectively. At the beginning of the fourth quarter of 2019, prices were 3.3% lower than one year previous.[4] The situation in the USA is slightly different. Exports in 2019 are expected to decrease by 0.8% in 2019 and increase by 5.7% in 2020. Production is predicted to grow by 0.3% in 2019 and by 2.7% in 2020, while consumption is expected to increase by 0.5% and 1.5% respectively in the same periods. At the beginning of the fourth quarter, prices in the USA were 2.7% lower than one year previous.

Summing up, in the fourth quarter of 2019, red meat markets in the EU and USA will be feeling the effects of significant demand for export to China, with no reason to believe that this demand will decrease. This should stabilize prices and trade between the EU and USA should continue to flourish – meat products or carcasses produced in these two regions which are not in demand in China will easily find consumers on the opposite side of the Atlantic.

The foundation for continued development of international trade is the strengthening of business relations, which is why we invite you to meet European experts in person during the trade mission to the USA and Canada which will take place from the 4th to the 9th of November. This will be an excellent opportunity to share experiences and find answers for all your questions about European meat.

In the United States (Austin, Texas) we invite you to take part in a session of B2B meetings, planned for Wednesday the 6th of November at 2.00 – 3.00 p.m. at the JW Marriott Austin (details: http://www.meatfromeurope.eu/blog/news/invitation-for-the-b2b-meetings-in-austin/ ). The meeting will be part of the European delegation at the MICA 58th AGM & Conference in Austin.

In Canada (Toronto, Ontario) we invite you to take part in the “High Quality European Meat – Tradition and Passion” workshop, which will take place on the 8th of November 2019 in Toronto from 9.30 a.m. – 12.30 p.m. at the Ontario Investment and Trade Centre (details: http://www.meatfromeurope.eu/blog/news/invitation-for-the-workshop-in-toronto/ )