British beef farmers are concerned by the current low beef prices. They have rightly singled out exports as an important lever to increase competition for cattle on the UK market and put pressure on prices, and are calling for a rapid increase in beef exports. They have also highlighted the loss of specialist exporters during the beef ban and potential pressure of retailers on large processors not to step up their export activities.
While supporting the aim of improving beef farmers' current low or negative returns, these assumptions must be discussed. First, beef exports are growing fast, up 16% in volume and value for the first half of this year to nearly all destinations. However, export growth must be solid and profitable, and any rapid growth in exports must not be based on 'buying' market share. Exports of this nature tend to lower prices for the whole sector.
This said, export growth must continue. Continued support from Eblex, in particular, will ensure a 'natural' balance between home market and exports.
The issue of exporters' capability is important. Nearly all major UK beef processors are now involved with exports. They do not do it for altruistic reasons, but for higher margins on overseas markets. Yes, we have nearly lost a generation of exporters and a wealth of experience during the 10 years of the export ban, but we are rebuilding it. The new generation of British meat marketers is increasingly adventurous and at ease on foreign soil. However, the development is slowed by the important issue of lack of export credit and the difficulty of operating in a low-margin environment. Furthermore, the main difficulty is a lack of responsiveness that stems from limited human resources, itself a consequence of low margins and retail pressure.
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