August 31, 2006

Global shortage in beef would prompt changes in UK beef supply

An expected global shortage of beef in five years would force the UK meat industry to revamp outdated, low value sales strategies brought about by chronic international surpluses, according to the British National Beef Association (NBA).

Most beef traders agree that international demand could outstrip supply as early as 2010-2012, NBA chairman Duff Burrell said.

The association said that the industry should prepare for a period when increasingly short supplies would generate extreme competition and much higher retail and ex-farm prices.

The NBA said improvements in the world economy would bring on increases in levels of beef consumption that even South American production would not be able to match.

This would be especially true since population increases and higher income levels are expected in China and Russia. This, coupled with lower production in Europe, would bring about shortages in beef supply, said NBA chairman Duff Burrell.

The low price-low margin attitudes the UK's retail and processing sectors are taking hampers the domestic industry's ability to take advantage of this trend as most UK processors and retail companies have not safeguard their own futures by encouraging domestic production, Burrell said.

Current supply strategies, which use easily obtained imported beef to top-up shortages, would have to be changed very soon, Burrell predicted. 

NBA advised that new strategies should be established in which more margin is generated for the chain as a whole through higher retail prices.