6 October 2010

2 minute read

Europe

However, while in the short term another fall is bad news, the long term forecasts are for consumption to rise faster than production, ultimately leading to higher and more consistent prices.

"The current situation is sending the wrong market signals to the industry," said Nick Allen, EBLEX sector director.

"All the indications for the longer-term are that beef production will not keep pace with consumption, leading to more buoyant prices for producers. However, the current price changes paint a less rosy picture.

"Some producers clearly have concerns about the availability of winter feed and we have seen an increase in under-finished cattle come onto the market recently. This higher supply has pulled the price down."

The World Meat Congress in Argentina heard last month that global meat consumption is expected to rise by 3.7 million tonnes by 2020, while other commentators predict a 5.5 million tonne deficit in meat supply as soon as 2015.

In England, the June census shows suckler herd numbers have actually risen slightly, to 756,000, but the dairy herd, which supplies half of our beef, has fallen to 1,160,000. There was a 27 per cent fall in the English breeding herd between 1990 and 2009.

"If producers look at the current situation and decide to reduce their herd size, it could mean that when global supply shortens as predicted, the English supply chain will not be able to fill the shortfall and retailers and consumers will be at the mercy of more expensive imports," added Nick.

"Only by keeping an eye on longer-term sustainability will the English supply chain reap maximum benefits from the economic changes ahead."

EBLEX continues to work to improve the profitability of English beef producers through technical knowledge transfer and dedicated projects, such as the current focus on opening new export markets.