Outlook for beef is buoyant, say MLC
The growing deficit in beef production in the EU and what is required for consumption means that demand for beef, both domestically and on the continent will remain strong. Speaking at the MLC Outlook Conference, Mark Topliff, senior economic advisor at the MLC, said this presented a good opportunity for UK producers to plug that gap.
While UK prices were behind those of other European countries, there was scope for cow prices to rise and not affect our competitiveness, he added.
Around 373,000 cows entered the food chain in 2006, adding an extra 7,000 a week to slaughter cattle availability. At the same time, there were slightly fewer steers being finished - 1% down on 2005 - while young bulls were down by 26%. Topliff attributed the removal of CAP headage payments to this change in the mix.
There had been a good appreciation in prices in 2006, with a slight dip in summer because of the weather, but the introduction of exports had added extra competition to raise prices. He went on to say that the export story was very encouraging. "Since we've been able to export again, you can see there has been a real increase in the trade in exports and we would expect to see this continue to grow in 2007."
While imports from outside the EU will fill the deficit gap to some extent, quota agreements and other restrictions on exports from non-EU countries have created a shortfall in beef, which in turn has driven up market prices, Topliff said.
In production terms, there will be a slight decline due to the numbers of prime beef being lower. In 2007, imports are expected to increase to make up for some of this decline and the export market is expected to grow to around 6,000t. Topliff added: "Because we will be exporting more in 2007, imports will increase to make up for this."
He believed the growing EU deficit in beef means the UK product will remain in demand, although the home market will remain the main outlet for our beef. At the same time, we will begin to see live cattle exports influence calf and store cattle values.
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