26 April 1996

Trading boost provides hope

for abattoirs

By Philip Clarke

GB MEAT traders will be looking to buy over 6000 steers in the next two weeks to cover their intervention requirements.

That is equivalent to about a weeks marketings at current levels and will go some way to getting things moving at abattoirs. But the prices on offer for the stock will do little to boost producer returns.

Following Brussels decision to loosen the criteria for accepting beef into intervention (Business, Apr 19) this weeks second emergency tender produced a much wider uptake.

In total, 12 EU countries had offers accepted for 37,095t of young bull beef and 14,638t of steer beef, at prices of up to 247p/kg dw and 238p/kg respectively. But, with about 9000t already taken in last week, all tonnages were scaled back by 21% in order to keep within the 50,000t limit for the month of April.

GB traders had offers accepted for 1577t of beef (mainly from steers) up to a maximum price of 219p/kg dw, equivalent to about 118p/kg lw. This was considerably more than last weeks 140t, but was meagre compared with the 11,155t from the Germans, 13,212t from the French and 6478t from the Irish.

The 1577t of beef accepted from GB will require about 5700 steers, though Meat and Livestock Commission economists suggest more than this number will have to be procured to allow for any rejections by the intervention agencies.

Some will come from live auction rings and some will be bought direct. But the MLC is quick to point out the 118p/kg lw equivalent will not be the price paid at auction, as slaughterhouse costs, specific bovine offals charges and haulage all have to be considered.

The NFU has expressed disappointment that the UK industry has made so little use of the facility and has stressed it wants to see a similar scheme available next month, but with a higher limit than 50,000t.

But UK traders are still sceptical about the whole procedure, not least because of the uncertainty of the tender procedure.

Edward Hamer from Lanidloes, Powys, believes the only solution is for the government to pay a guaranteed price to the trade and allow retail price to free-fall to a level that stimulates demand.

And Oriel Jones from Dyfed believes intervention should focus on forequarter beef, as it is the manufacturing end of the business that is suffering the most.

Meanwhile, finished cattle have continued to make a gradual recovery. Total throughputs at GB marts on Tuesday (Apr 23) came to 3639 head, up 21% on the week and only 1000 short of pre-crisis levels. Prices also improved by 7p to 107p/kg, though this was still 11p short of values a month ago. &#42