28 June 2002

Cut beef costs to compete with growing imports

By Jeremy Hunt

North-west correspondent

BRITISH beef farmers must cut their production costs if they are to compete with growing competition from high volumes of imports, says Lancs beef producer and wholesale meat buyer Jimmy Wood.

Mr Wood runs a company buying about 250 head of cattle a week, half in live markets, for independent retail butchers shops and caterers in northern England and Scotland.

"British beef is undoubtedly the best in the world, but we have to start producing it for less. The wholesale trade is under tremendous pressure to source its needs from imported beef supplies which are cheaper and very high quality.

"I dont think British beef producers realise just how good this imported beef is, particularly Australian beef," says Mr Wood of Popes Farm, Dutton, Longridge.

He believes reducing feed costs is the key element in keeping UK beef competitive, with imported boneless beef being offered at 88p/kg less than UK beef. "That is a lot of money and it is a big attraction for many wholesalers."

While finishers demand a margin from their cattle, the prices they require to leave a profit are still too high for an increasing number of wholesalers, says Mr Wood.

"There is room for everyone to make a living out of British beef, but producers cannot ignore the pressure of competition from abroad. Extensification payments and production subsidies are in place to support producers. I think there is still room to shave-off some feeding costs, take a bit less margin to remain competitive and still leave a profit," says Mr Wood.

He has never dealt in imported beef, but is beginning to wonder if he can hold out indefinitely. "Unless there are big changes in the costings that underpin British beef production I doubt if we and other small wholesalers will be in business in 10 years time."

Mr Wood quotes recent MLC figures showing the UK at 72% self-sufficient in beef. But a slow-down in supplies of UK beef, caused by the decline in the national beef herd has been further aggravated by foot-and-mouth, is reducing the self-sufficiency figure to 60%.

BEEFSFUTURE

&#8226 Must compete with imports.

&#8226 Cut feed costs.