March 9, 2011

 

UK beef organisation anticipates another cattle production exodus

 

 

UK's National Beef Association (NBA) warned Tuesday (Mar 8) of another exodus out of cattle production unless ex-farm prices pick up.

 

Director Kim Haywood said a 37.5% increase in fuel prices, a doubling in the cost of grain and 50.7% rise in the rates for natural gas needed to make artificial fertilisers had put huge financial pressure on the incomes of beef producers.

 

She said the perilous situation could persuade hundreds, if not thousands, of breeders and finishers to give up this summer unless the market started rewarding them for their efforts.

 

Haywood added, "A critical point has been reached. Breeders, almost to a man, are saying they cannot continue unless they earn more from the market and finishers have made it clear that unless slaughter cattle prices rise dramatically they will not be able to pay more for suckled calves and store cattle.

 

"This year will be a turning point. Tightening world, EU and domestic supplies mean cull cows are averaging 200p a kg (90.7p a lb) and relatively ordinary beef cows are making GBP800 (US$1,292.60) a head," Haywood said.

 

Those higher prices had already seen a 44% on-year jump in the number of cows sent for slaughter in January.

 

She contrasted the situation in the UK with that of Argentina, where beef production plummeted 23% between January and October last year after cattle fell out of favour with ranchers and farmers because of poor prices after its government banned exports. The cattle were replaced with cash crops such as soya and wheat. The drop in cattle slaughtering over the same period amounted to more than 10 million head.

 

Haywood further stated, "This justifies fears that if there are no radical improvements in domestic prices a huge proportion of the UK's breeding herd will take the same route as the Argentine herd has already done, and be sent to the abattoir and not to the bull this summer."

 

A lack of beef on world markets had not resulted in increases in ex-farm rates in the UK as many expected.

 

Haywood said unless immediate and drastic price improvements started to filter through then retailers would face either a lack of beef or have to become involved in reconstructing a production chain that had been unnecessarily dismantled, adding, "Beef cannot be produced in the UK at current volumes in future unless there is a quantum leap in farm income."