8 November 1996

Meat trade says EU supply control may suck in imports

By Tim Relf

MEAT traders are warning of a possible beef shortage, after the EUs announcement of wider supply controls.

And with it, they say, comes the "spectre" of reduced throughputs, higher prices and increased imports. "It is a double irony that the UK is cutting production to allow others countries, such as Holland and even Germany, to hit our markets," said a spokesman for abattoir group ABP.

"The last thing the industry needs is for beef to become very expensive. People do not need another excuse not to buy it. The EUs aim should be to stimulate demand, rather than limit supply."

Included in the package agreed last week by farm ministers are:

lAn extension of the calf processing scheme to all male calves from Dec 1. (Countries not adopting this must implement an early marketing scheme.)

lIntervention buying for lightweight animals in 1997.

lIntroduction of a single beef special premium for young bulls of £108 a head.

lInducements for additional extensification.

Tightening supplies are already being reflected in rising prices, which are now back over 100p/kg, says abattoir owner John Dawkins. And the situation could become acute by the summer of 1998.

"Those farmers that do not continue to produce beef will wish they had, with the possibility of this years losses being more than recouped."

But the Meat and Livestock Commission maintains that no shortage is likely in 1997 and prime cattle prices will not be much over 100p/kg for most of that period.

The calf processing scheme, which had taken 311,000 head by Nov 5, has merely accounted for stock which would otherwise have been exported, it says. But an expected 2.5% contraction in the dairy herd next year will affect future supplies.

Retailers, meanwhile, stress that demand is recovering, but dismiss suggestions of a shortage. Such talk could involve an element of scaremongering, said an ASDA spokesman. "Shoppers are still very price sensitive and will switch their allegiances if they see an alternative for the Sunday table."

As for demand, latest AGB data shows household purchases rose by 12% during the four weeks to Oct 20, compared with the previous four-week period. But that remains 17% down on the corresponding period in 1995.

Catering use – not reflected in AGB data – is now crucial to the supply and demand balance, adds NFU economist Tony Donaldson. And while currency revaluations may favour imports, domestic prices remain about 20% down on the beginning of the year, limiting the scope for imports, he adds. &#42

Different sectors of the beef industry came together recently for a carcass competition run by Meadow Valley Livestock at Dawkins abattoir, Nuneaton. Meat traders, including abattoir owner John Dawkins, have warned of a possible beef shortage as Brussels seeks to curb supplies.