September 9, 2009

Prospects for pure-bred UK dairy bull beef rearing look positive, as lower grain prices combine with tighter domestic prime cattle supplies and stronger consumer demand for mince.

There are also good export opportunities as the shortage of manufacturing beef in Europe continues and the sterling shows no sign of recovery against the euro, said industry body EBLEX.

Export prospect is further enhanced by the fact that there is little likelihood of any significant resumption in either fresh or frozen Brazilian beef imports in the foreseeable future.

Equally, continuing contractions of around 2.5% per year in both the national beef and dairy breeding herds will accentuate the shortage in domestic beef supplies.

Benchmark figures suggest a breakeven selling price to cover fixed and variable costs of GBP2.51/kg deadweight, at a ration price of GBP120/tonne.

The fact that these breakevens are close to present market realisations for -O3 carcasses, despite being based on what some may consider fairly high cost assumptions, underlines the clear opportunities available for dairy bull finishing over the coming season, said senior beef scientist Mary Vickers.

Although domestic beef consumption has fallen in recent months due to a combination of the recession and relatively high prices, EBLEX points out that demand for mince has held up well.

Recent figures show that while overall sales of fresh and frozen beef have dropped by 4.5 percent over the past year, mince sales were almost static.