Report Highlights:

Domestic consumption for beef and pork meat is predicted to continue rising stimulated by abundant supply in the European Union on one hand and the fiscal measure reducing the VAT rate for food products. Dairy quota elimination at EU level and reduced grains supplies in 2015 due to adverse weather factors led to higher slaughtering in the second part of 2015. Commercial sector for both cattle and swine is consolidating.

CATTLE

The Romanian bovine sector is forecast to continue its restructuring process. The cattle number is steadily growing after a drop in inventory in 2011. According to the latest inventory data published by the Romanian Statistical Office, cattle inventory grew by 0.4 percent in June 2015 compared to a year before.

Cattle inventory, Romania

Inventory at December 1st

2010

2011

2012

2013

2014

Cattle (heads)

2,001,100

1,988,900

2,009,100

2,022,400

2,068,900

In terms of farm size, recent data reveals that in July 2015 about 92 percent of all cattle inventory belong to family farms and only 7 percent to companies and associations. The commercial segment has a positive outlook, with considerable investment in genetics quality, housing, and herd management. Breeding live cattle imports doubled in 2014, showing a clear tendency for bovine farm improvements before the EU dairy quota abolishment. Hungary was in 2014 the major live cattle supplier, because of proximity, followed by Lithuania and Germany, the latter being a constant supplier for the Romanian market. Market conditions deteriorated in 2015 so the trend reversed and live bovine imports fell by 76 percent during the first 8 months of 2015.

Romania, Import Statistics Bovine Animals

Live, number of heads

Partner Country

Calendar Year

Year To Date

2012

2013

2014

08/2014

08/2015

%Change

World, of which

7,371

10,443

21,125

18,961

4,490

(76)

Hungary

772

4,564

8,510

8,090

983

(88)

Lithuania

-

200

5,892

5,892

850

(86)

Germany

1,589

1,556

2,129

1,467

537

(63)

Netherlands

760

926

1,455

1,148

457

(60)

Czech Republic

318

102

499

372

-

(100)

Italy

278

689

433

428

103

(76)

France

1,939

782

412

221

499

126

Other

1,715

1,624

1,795

1,343

1,061

(21)

Romania is a traditional exporter of live cattle. Lack of improved management and feeding practices prevent farmers from being competitive on the foreign beef market, hence the orientation towards live cattle exports. Farmers consider exports as an important driver for their calf production. Specialized trading companies purchase the calf and young bulls for export purposes.

The second part of the year 2014 was dominated by the drop in live cattle exports as a result of Blue Tongue disease outbreaks, which emerged in August 2014. The export restrictions imposed by several countries coincided with the Russian trade restrictions imposed in August 2014 leading to a live cattle and beef meat higher availability, consequently leaving to price collapse. In 2014 live cattle exports fell by 12 percent, the lack of foreign demand leading to a further drop in exports of 24 percent for the first 8 months in 2015. An isolated case of Bluetongue disease generated some fear that the previous year's context will be repeated in 2015, but those few cases in September 2015 remained isolated and foreign markets did not place bans on live cattle from Romania.

Romania, Export Statistics Bovine Animals

Live, number of heads

Partner Country

Calendar Year

Year To Date

2012

2013

2014

08/2014

08/2015

%Change

Total, of which

304,396

277,748

245,239

204,788

154,370

-24.62

Italy

47,657

57,372

52,764

44,549

17,508

-60.7

Spain

53,108

53,311

45,046

40,104

14,495

-63.86

Croatia

62,944

44,344

34,632

23,269

49,718

113.67

Israel

15,341

38,970

21,465

21,465

17,046

-20.59

Libya

27,921

25,437

15,322

15,322

2,731

-82.18

Jordan

19,914

12,285

12,262

12,262

7,760

-36.72

Poland

10,352

8,459

10,658

9,937

772

-92.23

Bosnia & Herzegovina

7,671

8,527

9,297

7,193

4,135

-42.51

Netherlands

13,382

4,718

8,560

7,486

357

-95.23

Albania

1,206

792

8,556

3,259

9,026

176.96

Hungary

12,676

7,230

7,407

6,360

8,018

26.07

Greece

11,992

8,571

7,385

4,659

8,755

87.92

Other

20,232

7,732

11,885

8,923

14,049

57.4

BEEF

The number of cattle directed to slaughter has declined every year since 2010. Given the predominance of the backyard sector, slaughter remains dominated by non-commercial cutting which accounts for about 80 percent of the total slaughter. A slight tendency for decline may be observed though, as holdings become less interested in raising animals. As young calves from the non-commercial channels (backyard farming) dominates the slaughtering structure, the carcass weight is in general about 120 kg, much lower than the carcass weight of cattle originating from the commercial sector which is around 215 kg/carcass.

Bovine Slaughtering, Romania

Slaughtering

(number of heads)

2010

2011

2012

2013

2014

Slaughterhouses

129,699

129,087

134,775

139,632

136,351

Backyards

(non-commercial)

648,660

622,086

593,421

576,684

554,325

Total slaughtering

778,359

751,173

728,196

716,316

690,676

Percentage of non-commercial slaughtering in total (%)

83.3

82.8

81.5

80.5

80.3

Cattle slaughter rose by 12 percent during the first 9 months of 2015 compared to the previous year, in response to higher beef demand, severe cow selection and unfavorable feeding prices due to summer drought. Most of the increase comes from the slaughterhouses and to a lower extent from the non-commercial segment, which only grew by 2 percent. The bovine slaughtering rhythm is expected to slow down towards the end of the year, as consumption switches to pork meat, the traditional meat consumed for the Christmas holidays.

The beef sector is characterized by a lack of predictability and limited number of cattle solely raised for beef production. In terms of breeds, the most predominant breeds are the mixed breed (Simmental type) raised for both milk and beef, but more recently an increasing interest is shown for high-quality beef. Under fears of losing profitability in the dairy sector, but also driven by rising demand for high-quality beef, farms partially switched their inventory towards beef. Starting with 2015, coupled support is approved for 35,000 heads of beef cows, meaning about 325 U.S. $/head of beef cow. Only farmers whose cattle are registered into the herd books and have a number of 10-250 heads are eligible for this type of support. This support is topped-up by the de-coupled support of 115 U.S. $/head from the national budget allocated for the number of bovines owned in January 2013, regardless the variations over time in the herd within a farm. The latter type of support is set to decrease gradually until 2020. Both types of support may further stimulate the bovine farms development.

Beef production is predicted to recover in 2015. In 2014 the Russian trade restrictions on EU imports, which created a temporary beef surplus at the EU level, generated an increase in beef imports into Romania by 42 percent at year level. Imports are estimated to continue the rising trend, based on recent trade data which shows an increase of 80 percent in imports during the first 8 months, compared to the previous year. The increase in imports may be partially attributed to the recent cut of Value Added Tax (VAT) rate from 24 percent to 19 percent starting in June 2015 for food products and which stimulated consumer demand.

Romania, Beef Production, Trade and Consumption

Carcass Weight (CWE), MT

2013

2014

2015 *

Beef Production

93,000

91,000

95,000

Imports

19,000

28,000

34,000

TOTAL SUPPLY

112,000

119,000

129,000

Exports

8,000

5,000

11,000

Available for Domestic Consumption

104,000

114,000

118,000

TOTAL DISTRIBUTION

112,000

119,000

129,000

The major fresh, chilled or frozen beef suppliers during the first 8 months of 2015 were Germany, Poland and Italy while Netherlands and Sweden were the major destinations for fresh/chilled Romanian beef. United States is supplying beef on the Romanian market through other EU member states. Intra-stat data reveals that the value of U.S. beef exports to Romania has grown from $78,000 in 2010 to U.S. $450,000 in 2014. U.S. beef export data for the first semester of 2015 suggests an increasing trend in both quantity and value, creating the expectation for at least a further 10 percent increase by the end of 2015.

Although at a smaller scale, an upward rising trend may be noticed for exports in 2015, the 8-month trade figure showing a double export volume compared to the previous year.

SWINE

Romanian swine inventory has been on a continuous downward trend since 2010, falling by 7 percent in five years. The inventory data collected for the May 2015 survey indicates an increase of 3.1 percent for swine, from 4.518 million heads in May 2014 to 4.659 in million heads in May 2015, indicating a possible trend change. The shares between commercial and non-commercial has changed over the past years in the favor of commercial sector, as the interest for raising pigs in non-commercial operations has diminished.

Swine inventory, Romania

Inventory December 1 (heads)

2010

2011

2012

2013

2014

Swine

5,428,300

5,363,800

5,234,300

5,180,200

5,041,800

of which sows

355,600

380,600

398,800

383,700

378,300

The piglet reproduction segment is not well-developed in Romania, as the level of required investment is much higher than the investments in fattening facilities and most of the integrated farms produce piglets for their own fattening farms. Thus, in order to satisfy the demand, piglet import for fattening grew continuously over the past three years. Germany, Hungary and the Netherlands have been the largest suppliers. The largest share of these imports (77-88 percent) represents live swine weighing less than 50 kg, for fattening purposes, and only a small share (3-6 percent) represents swine for breeding purposes. Piglet imports have slowed down during the first 8 months of 2015, possibly because of competitive pork meat imports. Live swine exports are negligible and they almost entirely go to the Moldova Republic market.

Romania Import Statistics Swine

Live, Number of heads

Partner Country

Calendar Year

Year To Date

2012

2013

2014

08/2014

08/2015

%Change

World

983,908

1,094,344

1,365,796

923,249

898,423

-2.69

Germany

155,948

324,456

481,434

313,035

390,677

24.8

Hungary

457,159

422,358

409,047

290,529

221,195

-23.86

Netherlands

273,878

277,389

335,323

244,993

210,056

-14.26

Slovakia

41,188

32,442

65,404

35,253

35,361

0.31

Denmark

16,500

14,748

29,380

17,097

16,098

-5.84

Poland

1,181

330

19,859

7,669

630

-91.79

France

2,896

7,545

1,439

1,065

4,175

292.02

Other

35,158

15,076

23,910

13,608

20,231

599

Unlike the cattle sector, where backyard slaughtering occupies a significant portion of total slaughtering, the share of backyard in case of swine slaughtering fell every year. The commercial sector kept consolidating and expanding, so that in 2014 about 84 percent of pigs originated from commercial growers as compared to 60 percent in 2010, in the context of a stable slaughtering number.

Swine Slaughtering, Romania

Slaughtering

(number of heads)

2010

2011

2012

2013

2014

Slaughterhouses

2,900,927

3,256,832

3,481,453

3,756,917

3,980,381

Backyards

(non-commercial)

1,886,620

1,619,612

1,297,649

939,931

778,332

Total slaughtering

4,787,547

4,876,444

4,779,102

4,696,848

4,758,713

Percentage of non-commercial slaughtering in total (%)

39.41

33.21

27.15

20.01

16.36

PORK

Pork meat production has grown gradually every year, due to investment in commercial operations. The statistical data available for the first 9 months of 2015 shows an increase of 6 percent in slaughtering, indicating that the positive trend will continue in 2015. The same tendency is anticipated for the pork meat imports given the rising domestic demand and the EU abundant supply. Considering the current trends, pork meat consumption is anticipated to continue growing. Fresh/chilled and frozen pork parts have the largest shares in total pork meat imports, mainly imported from Germany, the Netherlands, Hungary, Spain, and Poland.

Romania, Pork meat Production, Trade and Consumption (MT)

Carcass Weight (CWE), MT

2013

2014

2015 *

Pork Production

420,000

430,000

440,000

Imports intra-EU

200,000

222,000

238,000

Imports extra-EU

0

0

0

TOTAL SUPPLY

622,000

652,000

678,000

Exports intra-EU

27,000

27,000

27,000

Exports extra-EU

1,000

4,000

5,000

Available for Domestic Consumption

594,000

621,000

646,000

TOTAL DISTRIBUTION

622,000

652,000

678,000

In terms of meat consumption, statistical data pertaining to 2014 shows that per capita consumption of pork meat ranks first with 29 kg, while beef ranks third with 5.6 kg after poultry meat which reached 20.1 kg in 2014.

Romania, Meat per capita Consumption

Meat per capita consumption (kg/year)

2011

2012

2013

2014

Beef

5.2

5.0

5.1

5.6

Pork

28.7

29.6

29.1

29

Poultry

16.5

18.2

17.5

20.1

Sheep/Goat

2.2

2.4

2.4

2.3