November 23, 2010

UK abattoir inspection fees will increase beef costs

The UK Food Standards Agency (FSA) plans to lift GBP31 million (US$49.4 million) a year in new abattoir inspection fees from livestock farmers and red meat processors will not only reduce cattle numbers-it will push up beef prices for consumers, the National Beef Association has warned.

Such a huge addition to industry costs will inevitably close down large numbers of regional and local red meat processing plants. It will also deprive many tax payers of locally produced beef and put more cattle onto long distance transport to abattoirs that have survived.

"The more we look at the FSA's new scheme to maintain its income at the expense of the red meat industry the worse it gets," explained NBA director, Kim Haywood.

"Details of the cost damage that would sweep the sector, if the FSA remains determined not to cure its own inefficiencies through tighter in-house management, are beginning to emerge and the potential impact is numbing," she said.

It is estimated that the FSA's move could, depending on average weekly throughput, lift the typical cost of processing beef cattle moving through the wide regional network of medium sized abattoirs by anything from GBP11-GBP28 (US$17.53-US$44.62) a head.

While the smallest, and most specialist plants, that serve local farm shops and top quality butchers, could face devastating cost hikes of up to GBP60 (US$95.6) a head, or around 7% of the value of a beef carcase, because the full weight of the added inspection cost would be heaped on only a handful of animals.

"Small processors and beef producers simply cannot absorb this expense. Even the largest plants, with the biggest throughput, face a GBP5 (US$7.97) per head lift in inspection fees and if, as expected, this is taken from the farmer, and not the meat plant, then many of the thousands who are already thinking of giving up beef production because it is unprofitable will be persuaded to throw in the towel," Haywood said.

"This means fewer cattle, and less beef, with the inevitable result that retail prices will rise because supplies will be tighter. If consumers become angry at this they can blame the FSA for taking money off farmers instead of making a much needed effort to reduce its own costs first," she said.