Beef prices soar as demand climbs

Despite claims beef prices are "rocketing", the high prices of wholesale beef have produced mixed reaction in the industry.

Prices have risen sharply since the export market reopened in May, and some in the industry are claiming there is a shortage of prime cuts looming.

Nigel Tottman, of Nigel Fredericks catering butcher's, writing in Caterer and Hotelkeeper, said: "Export demand for Scottish and English beef has rocketed. With beef already expensive, even before this current hike, prime cuts will be worst hit. In some cases fillet is going to be more expensive than foie gras."

But Smithfield figures compiled for MTJ show prices have been high throughout the summer. Maximum prices for rump and loin on 26 July were 660p/kg. This fell slightly at the end of August to 641p/kg and the latest prices, for 19 September, show it is now 625p/kg. However, compared to the same period last year, these prices are high. Maximum prices for rump and loin on 23 September 2005 were 539p/kg.

This is good news for farmers. Stephen Rossides, head of policy at the MLC, said: "The whole tone of the market is firm and robust. Some of the best farmers are now squaring the financial circle. Producers deserve higher returns.

"For too long returns have not been covering the costs of production and the costs of the business. At the same time we don't want to adversely affect consumption, but demand is there."

However, Rossides said an MLC forecast for 2006, which is due to be updated soon, estimates 864,000t of beef will be produced compared with 1,064,000t of beef consumed. This shortfall is affecting catering butchers.

Alan Healey, purchasing director of Aubrey Allen said: "The export market means there's demand for meat that isn't there. The abattoirs are suffering. It's just a case of supply and demand. Steak prices are just rocketing and supply has been very difficult because availability just isn't there.

"We're not struggling, but we're concentrating on looking after existing clients. We're concerned, but it's not as if only Aubrey Allen can't get beef and everyone else can; we're all in it together."

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