Downturn dwarfs all worries
The economic downturn is dwarfing all other issues for the meat sector, but there are positives, delegates to the Outlook Conference heard last week. Richard Brown, a consultant with Gira, said: “All the other issues that people have spent time worrying and fretting about – even disease – have been dwarfed by the economic situation.”
On the plus side, he said, the resultant dampening in demand for meat was balanced out by the reduction in meat production. “It’s clear there will be less meat produced,” he said. “But we’re extremely lucky that this coincided with demand being so much weaker.”
However, he said meat prices would need to continue to rise and that the days of deflation were gone. “That’s not sustainable any more. In the future, for us to produce meat, people need to consider prices will need to go up.”
He said the recent spate of mergers and acquisitions in both the UK and the wider global meat industry had been brought to a grinding halt by the recession, but pointed out that the beef sector remained much more fragmented than other proteins and over-capacity was still a problem.
Brown said the purchase of Grampian by Vion was a good move for the UK market and would help to provide leadership in the sector and hopefully encourage businesses to invest.
With regard to competition from South America, he told the industry that while the Brazilian sector may have been struggling in the past year, it had recently seen the Real devalued and warned, “These boys are going to be back in business and serious competitors.”
Meanwhile, Defra’s Sue Popple warned delegates not to confuse food security with self-sufficiency and urged the industry to take the problem of climate change seriously – in both adapting to meet the changes it will pose and working to mitigate the damage. “The industry needs to be thinking about how it adapts to deal with increased volatility in weather conditions and, at the same time, it should be reducing greenhouse gas emissions.”