23 May 1997

UK nowlast in European beef prices league table

By Philip Clarke

DIFFERENCES in beef prices between EU member states have widened, with the UK languishing at the bottom of the heap.

French producers are earning the most, according to official reference prices, reported to the commission in Brussels each week.

At 147ecu/100kg – equivalent to 104p/kg liveweight at todays exchange rates – live cattle prices in France are not dissimilar to where they were before the BSE crisis broke.

Supply is relatively tight on the French market, says Remi Fourrier in the British Meat Paris office. Recent figures show a 31% drop in imports in 1996, principally due to the loss of UK beef supplies.

Meanwhile, demand continues to recover. Consumption for the whole of 1996 was down 7% on the year, says Mr Fourrier, compared with a 15% fall in the months immediately after the BSE crisis.

A recent French government initiative – the Controlled Quality Criteria scheme – was only a partial success, he adds, as the CQC label did not appear in the shops until well after the advertising campaign finished. "But, as long as BSE is out of the Press, consumers go back to what they like anyway – French beef," says Mr Fourrier.

At the other end of the spectrum are those countries with a strong export tradition, namely the UK, Ireland and Holland.

The latter two have seen some improvement in recent weeks. The Irish upturn has been prompted by a weakening of the Ir£, which has become less attached to sterling in recent weeks. A further boost was received last week, with a devaluation of the green Ir£, increasing the value of export subsidies.

Throughput has also tightened in Irish abattoirs, with steers down 32% on last year.

And in Holland, values have hardened as beef has benefited from the outbreak of classical swine fever in the pig herd. "Dutch consumers have started switching from high priced pork," says Meat and Livestock Commission economist, Jane Connor.

But the UK continues to see rock bottom prices.

Last weeks intervention tender has done little to lift values. While meat traders had all their offers accepted, amounting to 2796t of steer beef and 669t of young bull beef, this was only because their tender prices were below the 183p/kg dw threshold.

Buyers will be looking for about 10,000 animals in the next two weeks to put into intervention. But prices in the first half of this week were only up 2p to about 93p/kg lw for steers.

Continuing pressure from imports remains the key factor depressing the UK market, overriding any benefits of intervention support.

Latest figures show February imports up 69% on last year to 10,230t, with about 3900t coming in from Ireland and 1350t from Holland. "Our industry is being undermined by the dumping of cheap imports from Europe," says Scottish NFU vice-president, George Lyon. "It is about time Brussels insisted on the same application of BSE controls throughout Europe."