NBA warns over world red-meat glut
By FWi Staff
THE overload of red meat on the world market is likely to concentrate the European Commissions mind even harder on production cuts in the Agenda 2000 reforms, warns the National Beef Association.
The NBA blames the sheer weight of excess meat being traded internationally for squeezing cattle prices down to an average of just 78-79p/kg liveweight and 152-154p/kg deadweight. According to the NBA it is overproduction, not BSE, that has become the single biggest price fixing factor.
“It is true that our own market is cramped by the export ban, but the real reason for such low prices is oversupply at world, EU and domestic levels.
“If we stick to beef we can see that the economic wobble in the Far East has shut down a great deal of Japanese and Korean demand, and this has forced American and Australian cattle slaughterers to look for new outlets,” explained the Associations chief executive, Robert Forster.
The meltdown in the EUs favourite sink market, Russia, also means it cannot take as much of the European surplus as it used to.
One reason the surplus is proving difficult to move is that subsidy funded export outlets have already been choked off by the1994 GATT agreement, and the likelihood is that when the next WTO agreement is signed the export, restriction noose will be even tighter.
“This is bad news for beef farmers because it means the Commission will be thinking even harder about cutting production, and the way things are shaping up at the moment, it is likely to do this by hitting the easily identifiable suckler cow and leave a greater proportion of beef to be produced from the dairy herd,” said Mr Forster.
Some analysts have argued this position defies logic because the suckler cow is a specialist beef animal and pure-bred dairy bulls are a beef industry by-product. “But there are thousands of farmers who specialise in rearing and finishing dairy-bred calves, many of them beef crosses, who would be unhappy if production cuts aimed exclusively at the dairy sector deprived them of the animals they wanted or helped to force up calf prices,” said Mr Forster.
If Ministers of Agriculture agree to allow replacement heifers to qualify for suckler cow premium, there would be yet another drop in breeding cow numbers if individual farmers reacted by transferring quota from mature animals to unbred replacements.
“This is a problem that has to be decided by the industry. There is an argument that cuts in British suckler beef production would make it even easier for dairy bulls reared in Germany, Denmark and the Netherlands to secure a bigger proportion of the EU market and the UK would be the overall loser,” said Mr Forster.