19 January 2001

Cautious intervention not much help to beef trade

By Philip Clarke

BEEF market managers in Brussels have taken a cautious approach with their latest intervention purchase, doing little to support the beleaguered EU cattle trade and so increasing the threat to the UK market.

A total of just 11,660t of young bull beef was accepted last Friday, (Jan 12), most of it from Germany, Spain and France. Bids below k221/100kg (140p/kg) were accepted in full, with 50% acceptance for anything between that and k246/100kg (156p/kg).

That left the 1850t of steer beef tendered by Irish traders without a home, prompting an angry reaction from the Republics farmers. President of the Irish Creamery Manufacturers Suppliers Association, Pat ORourke, said he was shocked by the decision, which showed the commission was "totally indifferent to the huge losses being incurred by the beef sector".

The threshold price was Ir4p/lb (7p/kg) below the level being offered for over-30-month animals under the purchase for destruction scheme (PFD), he said, which was now the sole "non-market" outlet.

About 4000 animals went into PFD in Ireland last week, though this is expected to reach 12,000 this week as more factories come on stream. Part of the reason for the initial low uptake has been problems with SRM disposal. Ireland only has one plant.

Irish farmers have also become embroiled in a bitter row with the meat trade, which the Irish Farmers Association accuses of deliberately trying to undermine the PFD floor price, of about Ir90p/lb (161p/kg), by backing up cattle numbers in the system.

Despite this, under-30-month steer prices have benefited from the introduction of PFD, climbing from Ir86p/lb (154p/kg) to about Ir94p/lb (168p/kg) this week. Supplies are still extremely tight, according to industry body Bord Bia, but that will change as more farmers start to sell.

Much of that steer beef will be targeted at the UK. "The UK has been the least affected by the current EU beef crisis," said a spokesman. "With BSE appearing for the first time in Italy, Germany and Spain, those markets have become very difficult. And with the £ still quite strong, the UK is most attractive."

lIn a separate move, Brussels has agreed to loosen the rules on extensification premium for farmers who were unable to get their cattle away between Oct 15, 2000, and March 15, 2001, due to the current market situation. Those who can prove their case will be able to reduce headage numbers by 20% when assessing their stocking rates. &#42