UK fears onslaught of beef imports in autumn

6 July 2001

UK fears onslaught of beef imports in autumn

By James Garner

BEEF imports could soar this autumn as foreign beef takes up the slack in UK production, putting pressure on domestic prices.

Domestic beef usually accounts for nearly 80% of UK consumption. This year, due to foot-and-mouth, production will fall by 11%, estimates the Meat and Livestock Commission.

Next year the knock-on effects of F&M are likely to mean output slumps another 5%, giving foreign beef a real chance to create a foothold.

"It is really bad news," says Robert Forster, chief executive of the National Beef Association. "When you allow in more imports you lose control of your own market."

But Irish beef producers, who have been exporting record levels to the UK because of F&M-related shortages, are unlikely to benefit from UK market shortfalls.

The number of steers coming on to their market has shot up, now that the purchase for destruction scheme, introduced to offset falling consumption across Europe after the recent BSE crisis, has ended.

It has been replaced by the EU-wide (except UK) special purchase scheme, which is available for cows, heifers and bulls older than 30 months.

It will exclude about 6000 Irish steers a week which need to find a market, but are too old for the UK, and most Irish producers will not be able to switch cattle to an under 30-month finishing system immediately, says the Irish Food Board, Bord Bia.

This leaves the Irish desperately trying to open up more commercial markets, particularly as their cattle price is well above intervention, which fell by 7% on July 1, as part of the Agenda 2000 reforms.

R4L grade Irish steers are trading at 147p/kg dw and the MLC reckons these will have to fall by 4% before intervention becomes an option.

But the introduction of the new scheme looks likely to mean some surplus beef throughout Europe unless new markets open up. Fears of price pressure appear well founded, with the UK a prime target, says the MLCs Duncan Sinclair.

"We have lost 60,000t of beef production through F&M and we do not have 40,000t of beef in intervention stores to use like last year.

"Also the relative strength of sterling means the UK market is attractive," he says.

But Mr Forster says it is not all negative. "Beef consumption in the EU is picking up and Germany has sold 59,000t of beef to Russia so far.

"That is more than half its annual exports and will take a lot of cheap manufacturing grade beef off the market. The situation might not be as bad as it looks. 1 &#42

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