Farmers see drop in meat returns due to oversupply

UK farmers have seen their returns drop in recent months due to an oversupply of domestically produced meat, an increase in imports, plateauing consumer demand and a strong pound.

More beef, lamb and pork was produced in the first three months of this year, compared to the same period in 2014, while exports have fallen, according to Hybu Cig Cymru (HCC) - Meat Promotion Wales.

Imports of beef and veal to the UK between January and March 2015 were up 10% to 63,900 tonnes, compared with the same period last year. Meanwhile, UK beef and veal exports fell by 12% to 23,900 tonnes.

The current trading position for beef has been largely attributed to the strength of sterling compared to the euro, said Charlotte Morris, HCCs industry information officer.

The Russian ban on imports from the EU has also increased the availability of beef on the EU market.

The UK lamb market has also been adversely affected, with imports of sheep meat for the first three months of the year up by 12% compared to the same period last year, to 30,200 tonnes.

At the same time, New Zealands exports of lamb to the UK increased by 24% to 23,600 tonne, accounting for 78% of total imports.

Reduced demand for sheep meat in China and early marketing due to droughts in the country has resulted in New Zealand supplies of lamb being higher, said Morris.

Although overall UK sheep meat exports dropped during the first quarter of 2015, several European countries - including Italy and Belgium - received increased shipments of sheep meat from Wales.

New Zealand supplies of lamb are expected to reduce as seasonal decline in production commences and export availability declines, said Morris. Nevertheless, the strength of sterling against the euro could add some pressure to lamb prices, particularly as the lamb crop for this season is predicted to be higher than the previous year.

During the first quarter of 2015, pork imports were up by 3% on the previous year at 87,800 tonnes, as shipments to Denmark, the Netherlands and Belgium increased, while UK pork exports fell by 4% to 45,700 tonnes.

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