September 28, 2004

Scotland's Producers To Ponder As Global Beef Market Improves

Beef prices in Scotland are currently around 10% higher than last year, and demand is strong.

The same holds true for the international trade, with Australian and New Zealand producers enjoying one of their best periods for many years. Their situation is assisted by the ban on exports of US beef.

The Far East was formerly a key market for US beef. But Australian and New Zealand products are now filling the void caused by the export ban, brought about by a handful of cases of BSE.

Total exports of Australian beef in the first six months of this year amounted to 439,800 tons, an increase of 4% on the equivalent period in 2003. Trade with Japan jumped by 38% to 188,000 tons during that period.

However, a major concern for the industry is the soaring value of the Australian dollar, which is running 19% higher against the US dollar and 8% up on the Japanese yen, compared to the beginning of this year.

The currency factor is, in turn, playing into the hands of the New Zealand beef sector, where exports in the first half of 2004 rose by 13% to 268,000 tons.

Despite ample supplies of domestic products in the United States, imports of beef from New Zealand have increased by 5% to 143,000 tons from January to June this year. This has countered the drop in imports to the US from Australia over the same period from 164,800 tons to 155,200 tons.

The fact remains that the global demand for beef is expanding and that can only help to underpin UK domestic prices.

Scotland will never be able to compete in a commodity market. But if the export market were to re-open, the demand for a niche product is certainly there.