Beef prices Mcboosted to 95p/kg
By Tim Relf
MCDONALDS announcement that it will resume buying British beef has helped boost cattle prices.
Average values of all finished beasts in Meat and Livestock Commission sample markets on Monday was just over 95p/kg, up 1.74p on the week.
Together with other fast-food chains, McDonalds uses about 8000 beef forequarters a week, according to the MLC. That represents about 1200t – or 4000 animals.
The extra demand for forequarter meat will now put a sound bottom in the market, said auctioneer Jim Watson at Banbury, Oxon.
"It will help the big bullocks which have been very difficult to sell. Farmers, however, should continue to sell them no heavier than about 630kg in order to catch the intervention price."
Also supporting values is the seasonal shortage of cattle, typical in the gap between yarded and grass periods, said Mr Watson.
According to auctioneer John Uffold at Ludlow, there may be some time before any impact on farm-gate prices is seen, with stocks of forequarter meat first having to be cleared.
While this step will help rebuild consumer confidence, dont expect big price rises, cautioned Michael Parry, who takes the rostrum at Gaerwen, Gwynedd.
"The overall market is very price-conscious – and if something gets too expensive, it just wont sell." Regaining the export trade remains vital, said MrParry.
But speaking at the Royal Show this week, Larry Goodman, chief executive of ABP, warned that any lifting of the export ban would not automatically lead to a rise in cattle prices, because of the strength of sterling.
And from now on, there will be a 200,000t reduction in Europes level of subsidised exports due to GATT, he added.
McDonalds move will send a "signal of confidence" to consumers, said Mr Goodman.
According to auctioneer David Thomlinson at Carlisle, Cumbria, there was already more optimism ringside on Monday. And his hope now is that other big buyers who have turned away from British beef will resume sourcing it.
McDonalds may still import much of their beef, points out Mr Thomlinson. "What we need to see now are common European killing and handling standards."
With that "level playing field", British farmers would be in an excellent position to compete, he said.
Intervention demand, meanwhile, continues. Last Fridays adjudication, for example, saw 1149t and 545t of steer and bull meat contracts respectively awarded to GB traders.