Veal calf industry economics

Abstract

This paper provides an outline of the veal industry, its standing relative to other cattle farming enterprises, and its future prospects. In 2008 some 20 per cent of bovines slaughtered in the EU were for veal production and about one-third of them were dairy calves. France, the Netherlands and Italy were Europe’s leading producers. Veal consumption in the European Union has been in steady decline since 1970. In 2008, it averaged 1.6 kg per capita, with France and Italy being the largest consumers. Despite variations in farming systems and carcass characteristics from one country to another, veal production is an important outlet for milk replacer producers and provides a market for their industrial dairy products. Regular changes in production factors such as the price of 8-day-old calves and milk replacers and their availability engender recurrent output fluctuations. Veal calf production plays a major part in regulating the milk and bovine-meat markets: it has largely contributed to stemming dairy (and sometimes meat) surpluses. However, the context has changed since 2008 with no more surplus milk supply and reduced EU-support for incorporating skimmed milk powder into milk feeds. Therefore, the relative attractiveness of other productions using 8-day-old calves and the support policies for cattle farming as a whole will affect the future of the veal calf industry.