The 12th annual Langford Food Industry Conference explored major trends in global meat production, offering a challenging glimpse into what the future might hold for the British meat industry. Carina Perkins reports
With the British economy in crisis, the recession is the most immediate threat to the meat industry, although it has also offered some opportunities. Economist and AHDB advisor Bob Bansback said that a drop in household wealth has a dual effect on meat sales. Firstly, it directly affects the money that consumers have to spend, forcing them to trade down or switch to cheaper proteins. Secondly, households tend to save more in times of recession, which means they spend even less. "This has an impact in demand over and above the drop in household wealth," said Bansback.
Not all bad news
It is not all bad news, however. Not only is the food industry faring much better than other sectors, but the devaluation of the pound has helped boost exports and minimise imports, pushing up farmgate prices for cattle, pigs and sheep by 9%, 25% and 30% respectively. With the pound still down 10% on May 2008, exports have continued to flourish this year. "The red meat export side is going like a train," said Jean-Pierre Garnier, AHDB export manager. "Prices in the UK will be very good from 2008-2011," he said.
Richard Brown, director of food consultancy firm GIRA, described the recent price increase as the "salvation" of many British farmers, saying it had "arrived as a breath of oxygen to keep farmers alive".
But he warned that production costs remain high and if the meat sector is to remain sustainable and competitive in the future, its structure and power balance must change. "To date, there has been totally unacceptable distribution of margins from the production of meat," he said. "If the industry is to survive, we need higher long-term prices."
The speakers all agreed that better supply chain relations and fairer distribution of margins are essential if the industry is to survive. Brown pointed to the Danish pigmeat model of farmer investment through cooperatives as a possible model for the future of the UK meat industry.
CAP reform will further squeeze farmers margins, although John Bourne, Defra head of livestock, revealed that given the recession and the state of European agriculture, single farm payments are "unlikely" to disappear completely in 2012. Bourne said that the possibility of a World Trade Organisation (WTO) free trade deal represents a much bigger threat to livestock production, as it would open up European markets, putting downward pressure on farmgate prices. Bansback agreed that one of the main challenges facing the meat industry will be "the ability to compete with other countries at home and in export markets", should a fair trade agreement be reached.
Global meat consumption continues to grow for now, although there are numerous factors that might influence it in the future. Food security is slowly creeping up the global agenda, which has the benefit of turning government attention back to farming, but carries the risk of ethical and economical decisions to give livestock low priority when it comes to feeding the world.
The environment will be crucial, with warnings of official advice to eat less meat and stringent government regulations if the industry does not tackle its emissions successfully.
Dealing with meat's contribution to food-related health problems is another concern. "Diet will be one of the biggest issues in government over the next few years," said Bourne. "Food-related health problems are 9% of NHS costs."
Animal welfare, and the UK's ability to remain competitive, despite higher standards than its competitors, could cause more problems if a WTO deal is reached. "Under WTO rules, we cannot differentiate our products in the global market or stop imports of meat produced to lower standards," warned Dr Andrew Butterworth of Bristol University. Further animal disease outbreaks and endemic diseases will also pose a challenge.
Looking to the future, the experts agreed that there needs to be some serious reflection on the shape and structure of the British meat industry. There have been serious questions raised about the future of meat in the modern world, but global meat consumption looks set to rise for now and Britain is well-placed to meet demand with a quality product and potential for expansion.
Perhaps most importantly of all, the UK meat industry is incredibly resilient and has demonstrated an ability to adapt to many changes and disasters in the past. "There are good reasons for feeling positive about the future potential opportunities for the industry," said Bansback.
The Langford Food Industry conference took place at the Langford School of Veterinary Science on 13-14 May. It was organised by the University of Bristol and British Society of Animal Science.
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