February 13, 2009

Despite the certainty that recession will severely impact domestic consumption, the beef industry in UK continues to be positive for 2009.

 

British farming group English Beef and Lamb Executive (Eblex) says plenty of firm factors should see profitable returns not least the fact that prime cattle slaughtering are seen to fall below 2 million heads for the first time ever.

 

At an average of just under 260p/kg deadweight, AHDB Meat Services records show finished cattle prices in 2008 were a good 26 percent up on 2007 and more than 60 percent - or GBP1/kg - ahead of 1998.

 

The continual decline in yearly slaughtering, increased exports and static import levels have resulted to strengthened farmgate prices which may sustain this year, believes Eblex economics manager Mark Topliff.

 

The fall in slaughterings will result from the national dairy and suckler herds continuing to contract.

 

Cow slaughterings are also predicted to slightly decline from their post-mad cow disease peak of some 560,000 head in 2008 due to the drop of eligible animals remaining on-farm.

 

Some recovery in average carcase weights is expected from the lows of the past year - the result of better 2009 grass-growing conditions and lower feed costs.

 

Even so, Topliff says, overall UK beef and veal supplies are expected to fall back to around the 850,000- tonne level of 2006.

 

A foreseen growth in mince sales is projected to offset declining demand for steak and roasting joints.

 

As a result, annual consumption in the coming year is only forecast to fall back to 2005 levels, staying comfortably above the one million-tonne mark.

 

Moreover, Brazilian beef returning to the European market in any significant quantity for at least the first half of the year is still bleak, he suggests.

 

The likely continued weakness of sterling against the euro and its benefit for exporters is another reason for cautious optimism, Topliff said.