December 4, 2008


Efficiency needed for British beef operations


Kim Haywood, director of the UK National Beef Association, has warned beef farmers that they need to make their operations more efficient.


Without the single farm payment (SFP), which is worth more than GBP400 million a year to the Scottish rural economy, most beef farmers would be losing money in trades.


Haywood said that the good finishers are farmers who lose the least money, buy better cattle and feed them carefully, ensuring that they put on more weight over a shorter period at less cost.


She added that the best performers are definitely not the heaviest spenders. But on the breeding front everyone should be aiming to produce a calf from each cow every year.


Scotland's beef producers are enjoying an increase of about GBP50 per kilogramme in point-of-slaughter prices compared with last December.


But, if they ignored their subsidy payments, they would lose as much as GBP400 on every cow and about GBP200 on each prime beast sent for slaughter.


The top 3 producers might just manage to make a slender profit, but the rest of them have to catch up fast, according to Haywood.


Haywood added that further rises in market income through higher payments for finished cattle are fundamental to the survival of beef production in the UK at current levels and there are hopeful signs that these will come.


Five years ago, the total UK beef production was rated at 700,000 tonnes, but by 2007 that output had jumped to 882,000 tonnes - but that was entirely due to the fact that beef from cattle aged over 30 months was back in the food chain for the first time since the BSE crisis of 1996.


All the reliable estimates suggest that beef production in the current year will be less than 862,000 tonnes. And in 2009, output may struggle to hit 850,000 tonnes, with forecasts for 2010 to be even lower.


When full account is taken for inflation, the average beef steak is now almost 20 per cent cheaper than it was 20 years ago, according to the Office for National Statistics.


According to Haywood, farmers must clearly adapt to this new and challenging environment.


Consumers still appear prepared to buy beef. In the 12 weeks leading to November 2, the UK expenditure of GBP404 million on beef was up by a healthy 12 percent on the comparable period of 2007.


The real question facing the beef industry is whether this trend will be maintained in the early months of next year when household incomes come under increasing pressure.


US$1 = GBP0.668 (Dec 4)

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