In a stark warning to the UK Government, the National Beef Association (NBA) has raised concerns for the entire future of British beef production, unless support is forthcoming against the threat of cheap imports and the potential of damaged trade relations.
While the retail price for beef remains strong and steady, with only rump showing a slight reduction per kilo, finished cattle are losing value week after week.
Chris Mallon, chief executive of the NBA said that when you combine the total lack of any substantial beef promotions, with the steady retail price, it betrays the fact that demand for beef is far better than we are being told.
Lack of competition between UK beef processors prevents any difference between bid prices, and a restriction in options for finishers. The producers share of retail price is now below 48%, well under historic averages, and producers are understandably feeling underpaid for their produce, he said.
Mr Mallon explains: “Retailers have dropped beef promotion over the last five years, and have lessened their commitment to UK beef farmers, as shown by the plethora of false in-house farm brands. Retailers and processors need to realise that a cup of coffee at a show does little to equate to the almost £4million less paid to farmers for cattle last week, compared to 2018.
“We import over 20% of the beef we consume, and strangely Irish beef is ahead of some regions of the UK, before it has been imported into GB,” adds Mr Mallon. “The same companies creating waiting lists for UK cattle, are conversely filling their British based customers with imports from the Republic of Ireland, and other countries.”
The dairy beef sector is faring little better, the NBA says, as the present poor prices will put pressure on dairy producers to move back to euthanising bull calves instead of finishing them. The current processor pricing is making such production totally unviable, and retailers are increasing the likelihood of dairy calf euthanasia through their lack of support for British beef farmers.
“The question has to be asked, how can a nation that only supplies 70% of its beef consumption be over supplied by domestic production?” says Mr Mallon.
“The problem obviously lies with an over-supply of imported products swamping the UK market. Republic of Ireland beef, in Sterling terms, is beating UK prices and yet it still has to be exported into our market. Its importation as a loss leader is one of the mechanisms being used to control the UK price,” he adds.
Brexit planning by the beef industry has resulted in a surplus of beef, and has been blamed for the steady fall in prices seen so far this year. Concerns have also been raised that processors are importing bargain basement beef from suppliers, including those from Poland, and this further adds to market distortion.
“If Brexit preparation has created the toxic beef environment at the moment, then UK beef farmers need to be seeing financial support from Defra, to ensure we are still able to produce beef after a decision is made on our future EU relationship,” Mr Mallon concludes.