Elves are the second most aggresive civ in the game, and are really more offensive than goblin because, while goblins serve demon overlords and seek death and destruction, elves seem to seek control - they threaten you with sometimes deadly forces, such as unicorns and giant tigers, and will willingly go to war if you cut down too many of the trees that are on YOUR land. However, some are less offensive than others; when you can purchase exotic beasts from them, they serve a purpose - and when they bring you fruits during the spring, just after your winter supplies may have depleted, they can be of use. And when they demand something like 40 trees or less a year - we already were using less than 40 trees a year, so really, they have no effect on fortress life whatsoever. But if they ask too much - if they endanger the economy of your fortress by demanding 20 or less trees a year, they endanger the people. Because dwarves do not take orders from elves, and the moment they make an unacceptable demand, the caravan must be slaughtered. For when you fail to abide their unreasonable demands, they will attack in full force - they have made war an inevitability, and it is the duty of a good ruler to ensure that his people live. Stealing all of their shit means that you have a bunch more war animals, more food if you decide to make it a seige, and in general does good for your fortress. Sometimes they ask little of you, and it does no harm to maintain relations - but sometimes they offer nothing, and act as warmongers, and must be snuffed out for the good of all the kingdoms. And eating corpses is f****d up.
So in conclusion, if the local elves are being reasonable, and offer nice or even OK stuff, you should give them an offering once in a while, and try and have an alliance - because cool elves are hard to come by. Mostly, they need to be hammered to death.