2001

By FWi reporters

IT has been yet another traumatic year for the beleagured beef industry.

Last year, BSE in Europe wreaked havoc in the market as consumers on the Continent turned their backs on the product.

This year, foot-and-mouth has ravaged the UK industry and left it with 800,000 fewer animals than at the start of 2001.

The worrying consequence and the big challenge is domestic market share.

In 2000, just under a quarter of all beef consumed in this country was imported. In 2001 this rose to a third. Next year, the experts are predicting a further rise to 40%.

Prime cattle slaughterings have been running about 10% below last years levels for most of 2001.

Next year the shortfall is set to continue and pundits predict the UK will be short of 300,000 cattle. Inevitably, imports will shape the market and influence price.

In the first nine months of this year, German beef imports grew by 475% to over 7000t. A flood of imports will only keep prices in a straitjacket.

Ireland has sold record levels of beef to the UK this year, about 160,000t-190,000t.

It has benefited from close ties with UK processors and retailers and a competitive price, at one point falling to 140p/kg sterling equivalent.

And with trade this competitive, commentators agree that it is hard to see UK prices taking off.

Domestically, a huge number of bull calves are disposed of from the dairy sector each year, and analysts lament the lost opportunity to increase British beef on plates by taking advantage of this resource.

In 2001 at least 800,000 calves were taken out of the system. There is some hope this might have peaked as movement restrictions regarding multiple pick-ups ease.

The finished sector is crying out for these animals, which would certainly help offset imports, but unless there is a margin, producers will not get involved.

Some observers believe that an increase in slaughter premium, to about 48 a head next year, and the repeal of the limit of beef special premium claims made on one unit makes finishing better quality Holstein bulls a runner.

Other premiums are set to rise as well. Both suckler cow and beef special premium payments for steers are likely to increase by nearly 10, to about 120 and 90 a head, respectively.

Young bull BSP claims will gain even more, with payments likely to be about 126 a head.

Broadly speaking, prices have remained similar to last year for most of this one, with the GB average price at 168p/kg, compared with 157p/kg in the same week last year.

If supplies remain fairly tight in the festive period, there could be further gains, particularly if restocking keeps heifers off the market.

Beef consumption is improving throughout the EU and there is hope that more markets will reopen for third country EU beef exports.

Egypt has lifted its ban on Irish beef, which will help the UK market if trading resumes at the same level at which it left off.

This could deflect surplus EU beef away from the UK and keep the heat off domestic prices.

To view price trend for beef click here