A lot of ‘hot air’ on beef

norman bagleyWell, guys and dolls, you know you have really arrived when you’ve been invited along with the great and the good (and the less good - meaning me) by the Minister to no less than two hours in London, expelling hot air about how to save the beef industry from its present malaise.

A week on from the summit, my phone is inundated with members calling to say, “What on earth did you guys do at the summit? Couldn’t sell an ounce of beef last Monday and now it’s going gangbusters! Another week of this and it’ll be back up to £4/kg. Thanks, Norman, you’re a star.” And then I wake up from my dream. What has actually happened to the beef trade after all that talking? Nothing. Zero. Zilch!
I say ‘hot air’ because, with the emphasis on efficiency these days, most big deal management consultants and company rescuers expect an immediate turnaround in the fortunes of the failing company or industry. So what was the prospect of such a turnaround for farmers in beef prices as a result of this great boondoggle? Zero! Don’t get me wrong... I don’t blame the Minister for calling the meeting, as he will have been under serious pressure by the National Farmers’ Union et al to “do something”.

The great captains of industry were drawn from all corners of the UK – England, Scotland, Wales and Northern Ireland – and boy weren’t we bombarded with goodies: free coffee, tea and water for the whole two hours. Those boys and girls at Defra know how to tickle your fancy.

It was the epitome of Bill Clinton’s “I feel your pain”, with no prospect of things getting better.

Nick Allen of Eblex made the first presentation – and it was a blockbuster: too many cattle on the market; imports up (the Republic of Ireland going all out for the UK market, why wouldn’t they?); exports down due to currency appreciations; UK supermarket sales down culminating in – in his words – a “perfect storm”. We could all have gone home right there, as it said everything.

Next we had a Defra official presentation – a nice gentleman but rather removed from the reality of what he was talking about, who attracted derision from some of the assembled elite – highlighting the benefits of “traditional breeds” as the future to high-value marketing, which would save the beef industry from oblivion (I exaggerate but only by a bit). Avoid all the consequences of the here and now, at all costs.

We had the long-term stuff about efficiency, breeding, knowledge transfer (yeah, yeah) – enough to make you want to fall asleep.

We had a few bits about big processor “knock-offs” at abattoirs, but I was able to say that most of my members take off very little and reflect that in their bid price. All considered, a non-discussion really. The big guys charge what they want and so do we. As long as it is transparent, what’s the problem?

We then got onto the real issue: farmers blowing a fortune, while retailers and processors supposedly earn a mint. My intervention at this stage was to react to the Marks & Spencers guy (top man), who admitted they took “only a small proportion of the carcase”. This went to the heart of the matter, with big processors stuck with top meat they cannot sell to the supermarkets, and export on its backside due to currency appreciation. The obvious market conclusion was that this meat would be hawked around the wholesale market at discount prices. In other words, welcome to the real world.

When the Minister was trying to bring things to a close I intervened to comment as follows: “Minister, if major supermarkets continue to sell between 50-65% of their fresh beef as mince, what does that say about the future of the suckler herd. Is there one?”

I await his reply.

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