Firm Beef Prices in European Meat Markets

The European Union Meat Industry

At the end of 2015, EU household expenditures for Food and Drinks reached an amount of CAD $1.5 trillion, about 14% of total EU household spending. Being considered one of the most robust, stable and resilient industries with more than 289,000 companies of the Eurozone, the EU Food and Drink Industry achieved a total turnover of CAD $1.65 trillion with an estimate of 4.25 million employees.

Driven by the demand of 510 million inhabitants, the EU Meat Industry represented about 20% in total turnover and 21% in number of employees of the EU Food and Drinks Industry in 2015.

European Meat Consumption on average, 2017

Beef and Veal: 10.7 kg/capita   Sheep and Goat: 2.0 kg/capita
Pork: 32.0 kg/capita   Poultry: 24.5 kg/capita

In March 2018, EU market players priced the average steer at CAD $602.57/ 100kg cwt (CAD/EUR: 0.638, cwt: carcass weight), representing the highest price level in this category in comparison to any other international large volume marketplace.

The German Meat Market Deutsche Fleischindustrie’

In 2016, the German Food and Drink Industry achieved an estimate of CAD $187 billion in total turnover and employed about 419,300 people. In the same year, the German Meat Industry represented about 24% in total turnover and 41% in number of employees of the German Food and Drinks Industry.

German Meat Consumption on average, 2017

Beef and Veal: 10.0 kg/capita   Sheep and Goat: 0.6 kg/capita
Wild Game: 0.8 kg/capita   Pork, Poultry etc.: TBC  

Same year German companies imported, 72,000t cwt of Beef and Veal, 42,400t  cwt of Wild Game and 29,500t cwt of Sheep and Goat from extra‐EU countries. Calculated in Canadian Dollars, and in comparison to price and exchange rate levels of 2010, the German Consumer Price Index showed the following price levels in December 2017.

Price Increase in CAD $, since 2010   Average German Retail Price in CAD $/kg
Lamb Meat, chilled:   +58.53%   Lamb Chops:   CAD $31.55/kg
Beef Meat, chilled:   +37.80%   Fillet of Beef:   CAD $60.18/kg
Wild Game Meat, chilled:   +34.96%   Loin of Caribou:   CAD $79.35/kg

Latest Consumer Trends

With more and more people watching cooking shows on television, starting with chef Jamie Oliver in 2002, cooking with friends at home, dinner runs, or testing new recipes ‘a la nouvelle cuisine’, have become new social trends in German metropolises. With the average gross monthly earnings of German Full Time Equivalents (FTEs) reaching almost CAD $6,000 in 2017, young generations are exploring new food experiences and seniors are happy to take a look at a new ‘haute cuisine’ restaurant near‐by. Today, there are about 800 Gourmet Restaurants in Germany, with an estimated average turnover > CAD $3million/restaurant, most of them offering meat specialities on their menus.

While at the beginning of the millennium many consumers tested meat free alternatives and meat substitutes, the focus of today’s consumer is back on meat. Male consumers especially, see quality meat as part of a health and wellness oriented lifestyle, something not to miss. At the same time, consumers are aware of the high environmental footprint caused by mass industrial food production. Informed decision making by comparing food health, food taste and animal welfare labels in stores, and asking the restaurant waiter about sources of origin of meat offerings, have became the new normal. The ‘Food Consumption Survey 2017’ conducted by the German Ministry of Agriculture presented that 81% of respondents would like to see higher animal welfare standards implemented and be willing to pay about CAD $10 to $25/kg more for meat products from producers achieving higher animal welfare standards. A first version of a new federal animal welfare label was introduced by the Ministry later in 2017. In terms of bovine animals/ cattle for fattening such as steers, bulls, most animal welfare labels demand the following requirements from producers:
A) Steers, Bulls raised in animal houses using stable floors without columns or cracks
B) Stable floors constantly covered with animal bedding material
C) Minimum compartment space for a steer, bull of 661 lbs. in weight: 43 ft2
D) Pasturage, access for the steer, bull to open‐air, grazing areas in summertime

Opportunities for Canadian Export‐Oriented Producers of Quality Meat Products

The German marketplace extended its importance as being ‘one of the highest priced marketplaces for quality meat products’ in the European Union.
As shipment volume tracking based on e.g. Regulation (EU) No 593/2013 (09.4002, Hilton Quota) shows, more and more Canadian meat exporters successfully trade into the EU. Still, trade quotas given to Canada were far from being exhausted in 2017/18 by Canadian exporters. With the Canadian European Free Trade Agreement (CETA, Start September 2017) offering now preferential access to Canadian Producers and Exporters, we see very good opportunities and to position more Top Canadian meat products in the Eurozone. If you like to learn more about markets and trends, please don’t hesitate to contact us anytime.

Sources:
1) Eurostat: http://ec.europa.eu/eurostat/data/database
2) The European Commission: https://ec.europa.eu/commission/index_en
4) The Federal Statistical Office Germany: https://www.destatis.de/EN/Homepage.html
5) OECD: https://data.oecd.org/agroutput/meat‐consumption.htm
6) Greentech Avenue Analytics: analytics@greentechavenue.com

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