October 8, 2010

 

English beef sector faces sustainability threat

Falling beef prices in England have shaken confidence in the industry's sustainability but long-term forecasts suggest that consumption rates will rise faster than production levels.

 

The English Beef and Lamb Executive (Eblex) said the recent price plunge was sending out the wrong message to the industry, especially for suckler herd producers.

 

"Some producers clearly have concerns about the availability of winter feed and we have seen an increase in under-finished cattle come on to the market recently. This higher supply has pulled the price down," said Eblex sector director Nick Allen.

 

However, he stressed there is a more positive outlook for the sector. Last month's World Meat Congress in Argentina heard that global meat consumption is expected to rise by 3.7 million tonnes by 2020 and other commentators have predicted a 5.5 million tonne deficit in meat supply by 2015.

 

Figures for English suckler herds taken in June show that numbers rose slightly to 756,000. However, the dairy herd, which supplies 50% of the beef herd, fell to 1.16 million. Overall, there has been a 27% drop in the English breeding herd between 1990 and 2009.

 

"If producers look at the current situation and decide to reduce their herd size, it could mean that when global supply shortens as predicted, the English supply chain will not be able to fill the shortfall and retailers and consumers will be at the mercy of more expensive imports, he said.

 

"Only by keeping an eye on longer-term sustainability will the English supply chain reap maximum benefits from the economic changes ahead," he added.

 

The organisation is also concerned about rising input costs and the effects they will have on both beef and lamb producers. Diesel costs have increased by around 20%, while power and machinery prices are also up.

 

Eblex chairman John Cross said: "This rise in input costs, coupled with the current drop in beef prices in particular, raises serious concerns about the sustainability of the industry."