Optimism grows as first post-ban beef shipped
The first cow beef to leave Britain for 10 years was shipped to Holland earlier this week after the long-standing export ban was lifted on 3 May amid general optimism about rising deadweight values.
Scotbeef was quickly out of the blocks with shipments of prime beef to Holland and Belgium on Wednesday (3 May), while West Devon Meat said it was killing cattle for a buyer in the Netherlands.
Some in the beef industry have predicted that prices for top-grade steers will hit 235p/kg in England (15p more in Scotland) before the autumn, rising to match EU values.
But export bosses warned that it will take months before the orders really start to roll in and urged patience.
“There has been little happening this week.
We have been out of exports for 10 years and they don’t come back just like that,” said Jean-Pierre Garnier, export manager at the Meat and Livestock Commission.
“But there has been quite a lot of interest across Europe.”
Richard Phelps, managing director of Southern Counties Fresh Foods, the UK’s biggest abattoir, said he also thought price hopes were overplayed.
With the cost of shipping beef to foreign markets and a likely fall in EU values as the UK market came online, he predicted just a modest increase in domestic prices to about 220p/kg.
“Cull cows are a by-product which has to be got rid of.
What European supermarkets really want is primal beef and something special, like a provenance or a breed.”
Although SCFF’s partner company Romford Wholesale Meats is planning to step up exports of Continental bulls and heifers to Italy, there has been a lot of work behind the scenes.
“You have to align your supply chain.
We have been working with suppliers for 12 months.”
But cow beef will inevitably form the mainstay of exports, simply because there are so many cull cows and they were undervalued by the Over-30-Months Scheme.
France has already amended its legislation to permit British beef imports and the MLC is forecasting total exports to Europe this year of about 30,000t.
That is about a tenth of the level in 1995, when sales were worth £500m.
But overall, the industry was excited about the return of volume exports.
Robert Forster of the National Beef Association said Mediterranean countries would buy a significant amount of young bulls, offal as well as quality beef.
Offal sales alone could add £15 to the value of each carcass, he claimed.
He was also bullish about price prospects, saying the party was over for domestic beef buyers.
“The big difference between now and 1996 is that back then the EU had hundreds of thousands of tonnes of beef in intervention.
“Now we have a market in deficit while demand for beef in Europe is rising, which could suck out a great deal more beef from the UK unless the retailers pay more.”