European Beef Prices Touch 6-Month Low as Prices Plunge in Germany Due to Low Demand

Published 2023년 5월 30일

Beef prices in the EU-27 have dropped to new 6-month lows this May. However, prices remain relatively high in most major beef producing countries, with the exception of Germany, where declining meat demand seems to be worsening.

According to the latest data from the European Commission, beef prices (adult male, indicative) in the European Union touched their lowest levels in six months, trading at EUR 5.05/kg in the week starting May 15, 2023. The declines in weekly and monthly terms were relatively small, at 0.4% and 0.5%, respectively. However, this was the ninth weekly decline in the last fourteen weeks, when prices had reached a record high of EUR 5.17/kg.

Although prices remain higher compared to the same week in 2022, as expected, the current mark represents the lowest increment so far into 2023, at 1.7% YoY.

What is driving prices lower?

Tridge mentioned in a previous analysis that European beef prices were expected to remain relatively high throughout 2023, mainly on account of lower domestic production expectations -in turn, driven by lower cattle slaughter- and the possibility of further declines given the uncertainty over new environmental restrictions.

This still holds, as the average price so far 2023 in the EU-27 remains 8% higher than 2022's, which was already on a high base compared to previous years. In fact, this trend holds in most of the major producing countries:

In France and Ireland, the year-to-date price average is 13% higher than in 2022. In Italy, it is 12% higher, while in Spain, 15% higher.

The only major producing country that is breaking the mold is Germany, where prices are currently averaging levels 6% lower than 2022's.

Source: Tridge and European Commission

Given the fact that Germany is also seeing a significant reduction in its meat production - experiencing an 8% decrease in its beef production in 2022- it seems that the decline in German beef demand continues strong throughout 2023 and is more than offsetting the lower supply in the continent.

According to data from the German Federal Agency for Agriculture and Food (Bundesanstalt für Landwirtschaft und Ernährung or BLE) released last April, German meat consumption per capita fell in 2022 to its lowest level since at least 1989, at 52 kg per person. This is part of an ongoing long-term downward trend. Beef consumption in particular, at 8.7 kg per person, is down 13% from 2017 numbers. This compares to a higher drop in pork consumption of 20% and a small increase in poultry consumption, up 2% in the same period.

In contrast, plant-based alternatives consumption in Germany is reported to be on the rise. According to a report released by the USDA in January this year, the number of vegans or “flexitarians”, which means people who want to reduce their meat consumption, is growing in the European country. The number of “flexitarians” represents more than half of the German population, according to the report.

It seems that high prices have also played a role in the declining demand in Germany, as inflation shifts consumers’ preference to cheaper products. This is evident in poultry being the only meat with a production increase in 2022 compared to 2017.