30 November 2010

2 minute read

Europe

It says the pricing, in sterling terms, of beef cattle in Brazil at a record 255p-260p a deadweight kilo, coupled with last month’s Turkish government decision to all-but dismantle its previously mountainous beef tariff wall, confirm that trading on world, EU and UK beef markets is showing, at last, that consumer demand is about to outstrip farm supply.

“There are no pockets of cheap beef left in South America, or indeed anywhere else in the world, for supermarkets to use as a lever, as they have in the past, to force the market value of UK cattle below the true cost of their production,” said NBA director, Kim Haywood.

“Indeed cattle currently being sold in Northern Ireland and South-West England are, at current currency exchange rate levels, among the cheapest being traded on the world market and there is nothing to indicate that international demand for beef, currently being stoked by increased consumer purchasing in Brazil, Russia, the Middle East and most of Asia, will soon rise to levels at which consumer needs will exceed the delivery of cattle off farms.”

“The NBA looks forward to beef farmers being able to sell their cattle onto a much stronger, better balanced, market than is available to them at present and fully supports the efforts of Eblex, and other levy funded bodies, to put more effort behind the sale of more UK beef to higher paying customers in other countries.”

And so the Association is wondering how long it will ne before the most forward thinking of the UK’s multiple retailers put together contracts which secure their needs from a shrinking supply pool – and at the same time offer farmers enough money to cover their costs and encourage them to stay in business.

“The penny will have to drop sometime. Despite repeated warnings from ourselves, and others, that domestic beef production will continue to shrink because cattle are being purchased for too little money the typical supermarket has resolutely refused to install a more secure purchasing system,” said Ms Haywood.

“First come will be first served. Some market specialist claim that most supermarket beef buyers operate only on a day to day basis and never raise their eyes to see what is happening on the trading horizon.”

”Changes in the world and domestic beef market already show that position is self destructive and out-dated. It will be the earliest, and brightest, bird that will catch this worm. The NBA and many others in the beef sector are curious to see which of the big four multiples will react first.”

TheCattleSite News Desk