20 November 1998


Whats the outlook for beef, lamb and pigmeat?

Harry Hope asked the Meat and Livestock Commissions

strategy managers for their opinion

BEEF faces an increasing fight for a share of the total UK meat market, mainly due to competition from other cheaper meats, coupled with radical shifts in consumer taste.

Exports to both the EU and third world countries could be regained in the future but the EU market is also now under intense pressure. Influences include further enlargement of the EU, Agenda 2000 and World Trade Organisation proposals designed to encourage freer trade in all commodities. It is a road which could end up littered with casualties.

Simon Mead, head of beef strategy at the MLC says: "The reasons for poor producer beef prices are well documented. They include the BSE scare, expensive removal of specified risk material, loss of fifth quarter income which has inflated abattoir costs, loss of export outlets and the weight limit on OTMS cattle which has greatly reduced the value of cull cows and bulls from the suckler herd.

Awash with proteins

"On top of these factors must be added the unpalatable fact that the developed world is currently awash with animal and vegetable proteins of all sorts.

"On the brighter side, when date-based beef exports resume in the near future there will be two much-needed beneficial effects. Firstly, the psychological effect on consumers and producers alike. Secondly, the direct benefit to producers from an increase in price due to the opening up of an additional market outlet. Price improvement will depend on how quickly our beef exporters can build up their trade and relieve pressure on the home market."

But Mr Mead also cautions that the international beef trade has come under increasing pressure since the pre-BSE days when we exported some 30% of our total production. Global influences on beef returns, including sales to Russia, are difficult to appreciate at farming level, but they are inescapable.

He also cautions that reduced grain prices are likely to intensify competition from cheaper pork and poultrymeat. That means that beef production systems, including replacement calf and store prices, must be brought into line to guarantee an adequate margin on the finished animal.

The MLC estimates that profits can be made even when finished beef sells for around the 80p/kg liveweight now being obtained. This is unpalatable for all producers, but current market prices prove the validity and need for such calculations.

Pleas for increased funding to protect beef and sheep producers and the environment at upland level are also heavily dependent on political, vote-catching decisions, and cannot be expected as of right.

Coherent strategy

Mr Mead says: "All those involved in the complex beef supply chain are trying desperately to protect their own corners but the pressing need is for a coherent overall strategy which will help the industry to move forward in the highly competitive years ahead.

"At the moment, what happens at production level bears little relationship to what happens at the supermarket selling stage. There is a desperate need for increased co-ordination and it is extremely worrying when major abattoirs and processors claim that as little as 25% of animals slaughtered meet their tight specifications.

"At beef breeding level the average herd size is still only about 15 head so is it any wonder that the end product lacks the uniformity needed to ensure that increasingly discerning outlets get the beef products they require?

"Difficult questions must be faced and one of the first is whether farmers are producing what modern markets need now and in the future."

Innovation in infancy

Mr Mead believes that innovation with beef is still in its infancy for most sales are still confined to joints – now boneless – and steaks, with most of the rest ground-up for sale as mince or beef burgers.

"Is this range sufficient to attract younger consumers who now eat on the move, busy working mothers and those living on their own? It is also interesting to speculate how much of our home-produced beef will be eaten and in what form in 10-15 years when most food will probably be cooked in some sort of microwave oven.

"Beef seriously lacks a unique selling proposition, and without one the whole disjointed business risks going round endlessly in an unprofitable circle. That means the whole industry must subscribe to the same overall strategy to achieve clear and obtainable targets in the future," says Mr Mead.

"Times may be tough but it is not all gloom and doom and encouragement comes from the fact that home consumption has rallied to almost pre-BSE levels. That reflects a lot of effort by all parties in the meat trade. Regained consumption also proves that consumers still have a strong loyalty to British beef.

"The challenge is for farmers to breed and finish quality assured stock to higher standards with increasing uniformity, which the trade can then turn into an increasing range of products to match modern lifestyles. That is the road to fair returns for all, but it will be a long haul and we have hardly started," argues Mr Mead. &#42

See more