14 June 1996

Scares cause 20% slump in beef price

BEEF producer Richard Booth claims beef prices have fallen by 20% over the past year, due mainly to the BSE-crisis.

The loss in consumer confidence due to successive BSE scares in November and March, and the decision by the commission to cut refunds by 25% has led to the slump.

Mr Booth, who runs 230 beef animals, including 70 sucklers on 122ha (300 acres) at Port Laoise, County Laoise, said two-year-old steers from his predominantly grass and silage fed herd – sold to Anglo Irish Beef Producers, Waterford – were making £190 a head less than 12 months ago.

His immediate reaction to the last scare on March 20 was to "sell, sell, sell", fearing the crisis could permanently damage consumer confidence in Europe.

Although figures from the Irish Food Board, An Bord Bia, suggest domestic consumption has recovered almost completely, as consumers turned away from supermarkets and back to local butchers, nine out of 10 beef animals are exported from the Republic.

Mr Booth, past chairman of the Irish Farmers Association livestock committee is gloomy about a quick restoration of consumer confidence abroad, claiming member states had tried unsuccessfully to nationalise their markets over the past two or three years.

"When the scare first hit the Continent, the Germans tried to get consumers to only buy their own beef but it hasnt worked. What is so worrying is the collapse in the French market, which has never before been affected by BSE scares."

He predicted a difficult market in Europe over the next 18 months, adding that the implementation of the GATT agreement would also limit the volume of beef going to third nations.

With the North American beef market over-supplied, he argued there would be a substantial need for a cut in production, which might be aided by the continuing high cereal prices.

He believes there is one market and three possible production solutions to the current beef crisis in Europe. The market solution would be simply to let prices fall and hope consumption picks up.

One production solution, which is within the Macsharry CAP reform package, would be to extend the calf slaughter scheme and kill 20% of all male Friesian calves. This would not only cut production but also substantially reduce costs, as it would remove the eligibility of two beef special premiums and any intervention costs.

"It is the most cost-effective mechanism but would be politically difficult to sell to consumers. The only way you could sell the policy would be by saying it secured the incomes of farmers."

The second policy would involve a buy-up of the suckler cow premium quota, though this would seriously affect larger suckler producing nations, such as the UK, France and Ireland.

And the third would be to change the special beef premium payment system, which encourages heavy beef production, by ending the 10- and 22-month payments. Instead, there would be an increase in the suckler cow premium by £100 a head.

His message to the hard-pressed British beef industry is to develop quality controlled production systems with full traceability and a national ID system. Ireland has had an ID scheme since the early 1960s, and it is currently being upgraded to include cattle ear-tags with the help of EU cash.

Mr Booth urged UK farmers to look at slaughtering cattle at lighter weights, maximise grass use, carefully monitor feed ingredients and to press for a national full percentage declaration policy. &#42

Richard Booth… Quality control should be developed in the UK.