Mislabeled beef containing horse meat caused a scandal in Europe during the first quarter of 2013, but consumer beef demand was fairly unaffected by the news.
Rabobank analyst Albert Vernooij said consumer demand for beef was not impacted as the horse meat scare was not a food safety issue and consumers remain confident in the quality of fresh beef. EU beef prices stabilized at the start of 2013, but the Rabobank Global Cattle price Index remains eight percent down year over year.
Rabobank says the global outlook for the beef industry is mixed even as production and inventories remain light. The US beef industry started 2013 with lower export numbers, down 12 percent as the dollar strengthens and trade issues remain with Russia. Domestic US beef demand has also taken a hit with higher gas prices and an increase in social security tax. A cool start to the spring season and high prices for beef are also likely to limit demand for the near-future.
The horse meat issue will lead to changes in the regulatory measures enforced on Europe’s meat industry with more stringent tracking and tracing standards imposed by governments, processors and retail foodservice players. Vernooij says future regulations may trigger a significant increase in the number of dedicated supply chains.