Review of 1997 Beef

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.

Meanwhile, 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.

JANUARY

• 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.

FEBRUARY

• 
  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%.

MARCH

• 
  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.

APRIL

• 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 NFU.
  

  
  

• 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.

MAY

• 
  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.

JUNE

• 
  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.
  

JULY

• 
  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.

AUGUST

• 
  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.
  

SEPTEMBER

• 
  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.
  

OCTOBER

• 
  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.

NOVEMBER

• 
  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.

DECEMBER

• 
  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 say.
  

  
  

• 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 92.1p/kg.