Strong pound driving imports

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Livestock and Meat Commission (LMC) Chief Executive Ian Stevenson has confirmed that significant quantities of beef are coming into the UK from the euro zone at the present time.

But he was unable to specify what proportion of these imports is accounted for by beef processing operations in Northern Ireland.

“Beef import figures are only available for the UK as a whole,” he added.

“But it would not surprise me to learn that beef is currently coming into Northern Ireland from other EU member states.

“In the first quarter of 2015 beef and veal imports to the UK from other EU member states was up 12% on 2014 levels. 77% of the 59,000 tonnes of UK beef and veal imports from the EU in the first quarter of 2015 have come from the Republic of Ireland.”

“The current strength of sterling is acting to suck in beef and, no doubt, other food products from the euro zone.”

Mr Stevenson went on to point out that much of the beef coming into the UK is destined for the food service sector and certain retail and butchery outlets.

The labelling requirements highlighting country of origin etc do not play such a critical influencing factor in determining the value and choice of these products by consumers.

“Whilst the entire industry is struggling to eke out any margin at the present time there is a better news dimension to all of this,” he explained.

“The fact is that the British beef market ranks as ‘Number One’ in the EU price league at the present time with Northern Ireland in second place. And this is reflected in the farmgate prices available for cattle in both regions.

“Local processors are able to put the FQAS or Red Tractor symbol on all of the beef derived from farm assured cattle that are reared and farmed here in Northern Ireland. As a consequence, beef derived from such cattle can obtain a premium price when sold in UK retail outlets.

“The problem is that only a proportion of the carcase can be sold to the best paying customers in the UK, leaving local processors with the challenge of getting the best possible return for the remainder of the animal from other market outlets. Exports of beef from the UK to other EU member states is down 15% in the first quarter of 2015 relative to 2014 levels and this is putting added pressure on the UK market. Industry and government representatives in Northern Ireland have been working hard to try and open up market access to alternative export market opportunities in Asia, North America, Africa and the Middle East and this important work will continue to be prioritised.”

Meanwhile, UFU Deputy President Ivor Ferguson has said that the beef industry needs to better understand the volatility currently in the market, so that efforts can be made to mitigate against further damage in the future.

He added: “Since the ‘Horsemeat Scandal’ two years ago, the beef market has seen some considerable changes both with prices and specification. The huge demand for UK farm assured beef which followed the scandal took prices to record levels of 400p/kg, which is realistically the bare minimum price producers need to have any chance of making a margin which will allow them to re-invest and develop their business.

“However the dynamics in the market changed last spring and we saw a major collapse in prices.

“Over the last 12 months we have once again seen this trend replicated and with quotes at 310p/kg this week, these are not only causing huge losses for producers but also making it extremely difficult for anyone to manage their business.”

Mr Ferguson pointed out that the local beef industry is still heavily reliant on the UK market.

“However farmers are not convinced that enough is being done by Government to ensure that maximum resources are available to assist with work to open up new markets which undoubtedly can play a part in trying to reduce the existing volatility we are having to deal with,” he said.

“And if we look within the UK market itself, if consumer trends have changed in the last two years then retailers, processors and those Government funded organisations that represent the red meat sector have a job to better explain this to farmers so that they can produce what the market wants at the right time and ensure it gets a fair chance of being promoted properly.”