Rising consumption poor indicator of price prospects due to heavy stocks Bord Bia challenges Brussels' optimism Bord Bia published an implicitly pessimistic analysis this week of the beef market. Its latest Market Monitor reports the EU Beef Forecasting Group suggesting the gradual recovery of consumption across Europe after the BSE scare last winter will result in a drop of just 6% this year from the 2000 level and 9% from 1999. But Bord Bia reckons: "This would seem optimistic given Brussels figures suggest that during January to October consumption declined 17% [from] 2000 levels. "Even allowing for November and December being well ahead of 2000 levels, a decline of 8-9% would seem more likely." Although the disputed forecast is for the total EU market, it is directly relevant to the UK because the collapse of demand on the continent forced Irish processors to switch product into the trade here. The pace of recovery in the other member states will determine how long this extra supply pressure persists. As the Bord Bia commentary hints, rising consumption could be a misleading indicator of price prospects even if the Forecasting Group's optimistic projections prove accurate. Heavy stocks built up during the crisis are still overhanging the market. "Despite the recovery in consumption, the size of the beef surplus on the EU market is expected to be approximately 1.1 million tonnes for the year as a whole," Bord Bia points out, noting that higher production and reduced exports have exacerbated the effects of weak demand. {{MEAT }}

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