December 01, 2003

 

 

UK Beef Industry Face Market Uncertainty in 2004

 

With the local meat plants gearing up for the Christmas market over the coming fortnight in the United Kingdom, the prospects for beef prices, at least in the short term, seem reasonably good.

 

Adding to the feeling of optimism is the fact that Great Britain will be reliant on beef imports for the foreseeable future, which is currently running at 40% of total consumption.

 

But cattle availability will have an impact on the strength of the market in the New Year. And therein lies the problem. The meat plants are currently having difficulty estimating the number of cattle due to be finished over the coming months.

 

"The last fortnight has seen the plants processing large numbers of animals," Northern Ireland Meat Exporters' Association (NIMEA) chief executive, Cecil Mathers said.

 

"However, no one is sure if these are extra cattle that have been bought in by farmers system or animals that have been finished faster in the wake of the excellent conditions experienced over the summer and autumn months.

 

"And obviously if there is a shortfall in numbers come the new year, this will serve to retain a degree of buoyancy in the market."

 

The New Year will also see agreement on the implementation of the mid-term CAP reform package. And again, the plants are finding it difficult to determine how the beef sector will react.

 

"The real quandary for the plants is how to predict the number of animals that will be available to them," stressed Cecil Mathers.

 

"Only in this way can they determine the level of contractual commitment that can make to their own customers. Some livestock farmers are saying now that they will cut back on cattle numbers post decoupling. But then again they might change their minds, once they find out the size of the single payment they will be eligible to receive."

 

He added: "There now seems little doubt that we are heading for a period of uncertainty between the third quarter of next year and the autumn of 2005, during which time the livestock industry will work out how it wants to respond to the CAP reform package.

 

"However, uncertainty of this nature represents the worst of all worlds for the local beef processing sector, which has to do business in a very competitive marketplace!"