It cannot get worse for beef – can it? – FWi REVIEW O

December, 1997

Compiled by FWi staff

ITS doubtful whether any beef farmer
sitting down to enjoy Christmas dinner this year will want to look back
on 1997 with anything more than a cursory glance.

The British beef
industry is in tatters. Producer prices for finished cattle have dropped
by around 20p/kg over the past twelve months and the much-hoped-for
lifting of the beef export ban has failed to materialise.

beef imports have flooded into the country. The defining event of the
year came in December, when frustrated farmers vented their frustrations
and blockaded ports around the country.

As the beef-on-the-bone ban
begins to bite, the only consolation is that the situation can hardly
get worse in 1998.


  • Cattle
    prices open the new year buoyantly and hopes are high that the beef
    export ban could be lifted soon. Steers and heifers average 109.6p/kg
    with young bulls selling at about 111p/kg. The cold weather has helped
    demand, say retailers.

  • The lifting of the beef ban would restore
    confidence in British beef at home and abroad, says Gwyn Howells,
    marketing director for the Meat and Livestock Commission (MLC).

  • The MLC announces plans to spend £2-2.5m on retail beef
    promotion during February after statistics show UK beef consumption fell
    18% in 1996.


  • A flood of cheap
    beef imports from Germany is blamed for a standstill in UK prices,
    despite improved consumer demand. Sterlings strength allows UK plants
    to source German beef at a discount of up to 10%.


  • Cheap beef imports are delaying the recovery of UK cattle
    prices, claims MLC economist Mick Sloyan. But the trade is legal and
    cannot be stopped, he adds.

  • Cattle prices drop below 100p/kg for
    finished steers as pressure from imports and reduced intervention buying
    takes its toll. Economists predict a 9% rise in supply for 1997.

  • The case for lifting the beef ban is overwhelming, says a
    cross-party committee of MPs. But the EU Commission disagrees and the
    export ban remains.


  • Beef farmers face a
    further 25% fall in gross margins after MAFF announces new rules
    requiring butchers to separate the vertebral column from other beef
    carcass bones. The costs will be passed on to beef farmers, claims the

  • Government aid to renderers is cut from £118m to
    £59m. With beef prices as low as 88p/kg in Wales, the NFU describes
    the measures as “depressing”.

  • Angry farmers ask why retailers
    have failed to react to the fall in prime cattle prices. Producer prices
    are 20% below the pre-BSE level but the price of rump steak is actually
    selling for 2.4% more than it was 13 months ago, they claim.

  • Brussels accepts almost 5000t of steer beef into intervention at
    prices of up to 191p/kg. Meat traders are surprised at the volume
    accepted and beef prices rise by about 6p/kg.

  • Imports of Irish
    beef into the UK have increased by 50%, according to MLC statistics.
    Overall beef imports show a year-on-year increase of 23% but UK
    consumption is still 12% below pre-BSE crisis levels.

  • Beef
    farmers claim the UK market is swamped by beef from EU countries which
    do not abide by the same stringent health regulations.


  • Depressed cattle prices
    look set to continue for the rest of 1997, according to the latest MLC
    report. Prices are at a 16-year low.

  • At 93p/kg for steers, UK
    beef prices are the lowest in the EU, according to a Brussels-produced
    report. “Our industry is being undermined by the dumping of cheap
    imports from Europe,” asserts Scottish NFU vice-president, George Lyon.


  • McDonalds resumes
    buying British beef. Average values for all finished cattle rise to
    95p/kg. Together with other fast-food chains, McDonalds uses about 8000
    beef forequarters every week, according to the MLC. That represents
    about 1200t or 4000 animals.


  • EU officials
    accuse the UK of flouting the worldwide beef ban by fraudulently
    exporting at least 700t of tonnes of British beef. NFU president, Sir
    David Naish, says he deplores anybody who dealt with the exports but
    remains confident that the issue will not affect negotiations to get the
    beef ban lifted. Farm minister Jack Cunningham retaliates with new plans
    to prevent illegal exports of British beef.


  • Intervention limits
    mean beef prices are unlikely to rise, according to meat traders. But
    meat rejected from intervention has to be sold at knock-down prices,
    says abattoir owner John Dawkins. “Its certainly not a business you
    want to rely on,” he adds. Steers average 100.68p/kg.


  • A combination of slightly improved finished cattle prices
    and Green Pound revaluations means that UK beef could soon be
    inelligible for intervention support, warn economists.


  • The NFU publishes a report showing that finished cattle
    prices in north-east England are suffering from the legacy of BSE and
    the strength of Sterling.

  • The situation is far from bullish in
    the rest of the country. At Exeter, the overall average for finished
    steers falls to 90.57p/kg.

  • In Wales, the situation is very much
    the same. There is little sign that the downward trend will be reversed
    in the near future, says Arwyn Owen, commodities officer of the Farmers
    Union of Wales.


  • Bagshaws
    auctioneers describe the cattle at one of their sales in Bakewell as
    “without doubt the worst selection on offer this season.” Prices for
    plain cattle are as low as 60p/kg.

  • At Uttoxeter, prices fall to
    the lowest levels for five months. Exeter Market Auctioneers reports
    that many farmers are selling cattle rather than paying for feed over
    the winter months.

  • The beef industry needs a shot in the arm,
    says auctioneer David Edwards of Shrewsbury market.


  • The EU suspends
    intervention for beef until at least the end of the year, arguing that
    the European market has largely recovered. But the MLC expresses concern
    that plans to sell existing intervention supplies – which total 680,000
    tonnes of beef – could have a further downward effect on prices.

  • The Government announces a new ban on beef-on-the-bone. Farmers
    decide enough is enough and blockade ports around the country to prevent
    beef imports.

  • Despite the extension of the beef ban, auction
    prices appear to be stable. But auctioneers warn that returns are
    inflated because Christmas Show Auctions attract top-quality cattle. The
    real effect of the new ban will only be known after the New Year, they

  • About 500 farmers gather at Banbury market to draw
    attention to the crisis facing the industry. Midland Marts auctioneer,
    Ian Smethurst, tries to put a brave face on the situation. The
    beef-on-the-bone ban “was the last piece of the jigsaw and shouldnt be
    regarded as a disaster,” he says. But medium steer prices average only

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