WASHINGTON – Beef cow herds are shrinking in the European Union, but expansion of the dairy herd will increase the number of cattle for slaughter, the US Department of Agriculture said in its Livestock and Products Annual report.

USDA forecasted an increase in beef production in the EU on elevated slaughter and low prices for feed. The dairy herd is expanding in Northern Europe, USDA noted, and the supply of calves and bulls for fattening and slaughter will increase. USDA's forecast is based on the liberalization of the dairy market.

USDA also reported that the EU will find alternative markets for beef exports intended for Russia. The EU is expected to lose about 15,000 metric tons (cwt.) of trade compared to a year ago when Russia imported about 46,000 mt (cwt.) in 2013. In August, Russia banned fresh and frozen beef from the United States, EU, Canada, Australia and Norway.

"Exports to other third countries destinations, mainly to the Balkans and Hong Kong, rose by nearly 20,000 MT (CW) during the first half of this year," USDA said in its report. "This indicates that the EU will be able to redirect EU beef production previously exported to Russia to alternative markets. This assumption is further supported by lower competition on the world market as South America is expected to expand its exports to Russia."

Meanwhile, demand for pork meat is declining on the domestic market despite improvements in efficiency in the EU swine sector.

"Broiler meat is increasingly preferred by consumers based on the perceived health benefits above the generally more fatty pork products," USDA noted. "Poultry is also more easily processed in snacks and prepared meals."

However, EU pork producers are finding alternative markets for their products. Sales of pork rose in Japan, South Korea, the Philippines, the US and Taiwan. USDA attributed the higher sales to Japan, South Korea and the US on the outbreaks of Porcine Epidemic Diarrhea Virus (PEDV). But the overall increase is insufficient to offset the lower sales to Russia, Belarus and Ukraine, USDA said.