17 May 2002

Argentinian beef puts squeeze on UK product

By James Garner

UK BEEF prices have fallen dramatically in the past few weeks with the trade blaming large quantities of Argentinian beef for the sudden downturn.

This weeks average GB cattle deadweight price for steers has continued the downward trend of the past few weeks. Average prices are 168.7p/kg, 3p/kg lower than just two weeks ago.

This figure also masks a poorer trade for English and Welsh finishers, who are receiving on average another 2p/kg lower than their Scottish counterparts. At the quality end of the market the difference grows, with prices north of the border 7p/kg higher than an English R4L grade steer trading at 170.9p/kg.

The National Beef Association claims bigger market falls and is laying much of the blame at Argentinas doorstep. The country is trying to meet its 28,000t quota of beef exports to the EU before the end of June. It was banned from exporting beef until Feb 1 this year, due to a recent foot-and-mouth outbreak.

Robert Forster, chief executive of the NBA, says some wholesalers and importers are finding the heavily discounted Argentinian beef an attractive option they cant refuse.

"It is a huge temptation – it is at about a 30% discount and it is all being shovelled into just four months. The problem is that the UK depends on imports, but when the trade is sluggish we would expect the first choice for product to be British.

"There is a lot of this Argentinian beef swishing about looking for a market. Unfortunately, it comes at a time when the most costly home-produced yarded cattle are coming to the market."

Duncan Sinclair, beef economist for the Meat and Livestock Commission, agrees that beef from Argentina is having an effect on the UK beef market, particularly as it coincides with a seasonal downturn in demand for beef.

"The whole trade has slowed up. There is plenty of talk of some abattoirs slaughtering on just three or four days at the moment. It is pointless them slaughtering on more days when they cant sell the meat."

The end of the European special purchase scheme for over 30-month beef has added to EU supplies, which are also depressing prices, he adds.

Estanislao Zawels, Argentinas trade councillor, confirmed that Argentinian abattoirs were working flat out. "We are unlikely to fulfil the quota in just four months, but we will try to."

He argues that most of the beef is hind-quarter and will end up in German steakhouses. In a normal year, nearly three-quarters of its quota goes to that market, with the UK taking only about 1700t, mostly to restaurants and caterers. He says that the beef meets exacting standards set by the EU and there is no way that any growth promoters or hormones would have been used.

But the NBAs vice-chairman Frank Momber is concerned about production methods.

He adds that food assurance bodies should be doing more to ensure that suppliers meet the same standards as UK producers.

But Ian Frood, chairman of Assured British Meat, says there is little that can be done when dealing with caterers and restaurants.

"The food service sector tends to operate largely outside food assurance. I think the restaurant sector should be made to disclose the provenance of the beef it is buying." &#42

Prices for British beef animals are slipping as Argentinian beef finds favour, says the NBAs Robert Forster.