15 September 1997
UK beef rejected from EU intervention stores
By Amanda Cheesley in Brussels and FWi staff
A COMBINATION of slightly improved cattle prices and the recent revaluation of the green pound has made UK beef virtually ineligible for intervention support.
As predicted, huge amounts of British beef were rejected from EU intervention stores on Friday, because of the UKs seemingly stronger prices, according to the Intervention Board.
Only 42t of British steer beef and 48t of British bull beef was put into EU intervention stores, at a maximum EU price of £186.46 per 100kg. Huge amounts were also rejected from other EU-member states, with only 8,195t put into intervention, out of total EU offers of 47,300t.
The cutbacks in intervention take-up are part of the EU Commissions bid to prevent a repeat of the heady days of the 1980s when beef mountains grew to uncontrollable levels.
The system works by converting deadweight prices for each grade of carcass into R3 equivalents, which Brussels then converts into Ecus. If this Ecu rate is more than 80% of the intervention price, then the grade might not be tendered for intervention.
Following the green pound revaluation on August 21, each p/kg of carcass meat in the UK converts into more Ecus in Brussels.
Already the standard O grade of meat has tipped over this threshold, making it ineligible for intervention, and now there is concern that the R grade could be triggered as well.
Meat going into intervention is broken into three main categories, O grade refers to standard quality, R grade equals good quality, and U-grade carcasses are the highest quality.
The significance for farmers is less than it might have been a few months ago. In May, almost 3000t of steer beef – equivalent to about 8000 animals – was going into intervention every two weeks. The previous tender saw under 1000t accepted from the UK after severe scalebacks. This time a total of only 90t was accepted.
This issue was flagged in the business section of Farmers Weekly (Sept 5 – 11). Meat and Livestock Commission economist Jane Connor said at the time: “There is less dependence on intervention at the moment, as cattle are in short supply seasonally.”