Interest muted for sheepmeat storage
ONLY 1254t of private storage aid has been tendered for in the first round of the EU sponsored sheep- meat scheme, confirming industry speculation that the offer would attract only limited interest.
The scheme, announced at the end of July, allows abattoirs to bid to store lamb for up to seven months, taking pressure off the market.
Figures released on Wednesday by the Intervention Board revealed that 59 bids, ranging from ?1256/t to ?2611/t, had been received by the closing date of Aug 27.
Peter Scott, director of the British Meat Federation, said he was not surprised. "The need to prevent fraud means a lot of bureaucracy and this makes the whole scheme very ponderous.
"The fact that the closing date fell on the bank holiday Monday may also have prevented some processors making last minute offers," he added.
However, at the Meat and Livestock Commission, chief sheep economist Jane Connor reckoned firms may be simply be testing the water for the next round which is open until Sept 17.
"Previous schemes involved fixed prices so I think the processors want to know the level of bid Brussels will tolerate. If it is acceptable they may go in more heavily next time."
The adjudication process will take place today(Aug 31) at the European Commission management committee meeting.
The risk involved with forecasting consumer lamb demand could also be swaying the processors decision to hold back, noted Ms Connor.
"I imagine most will be planning to sell the frozen lamb next spring when supply is usually lower, but it is difficult to predict what the market will be like then."
Mr Scott confirmed a lot will depend on competition from abroad. "At that time UK lamb will have to compete with New Zealand imports, although they may already have used up some of their quota during the foot-and-mouth shortages." *