Beef farmers face crisis as demand falls to 'lowest since BSE'
PUBLISHED: 08:11 09 August 2019 | UPDATED: 08:11 09 August 2019
The UK meat industry is in a period of crisis as demand plummets, prices fall and Brexit looms, Suffolk and Essex livestock leaders have warned.
Graham Ellis, auctioneer at Stanfords in Colchester, which runs a weekly cattle and sheep livestock market, said while the UK beef industry was producing what in his opinion was the "world's best" meat, it was doing so at a level which isn't cost-effective.
And Bury St Edmunds-based pig consultant Peter Crichton warned of severe effects if the pork industry is faced with a 'no-deal' Brexit.
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The British Meat Processors Association (BMPA) has warned that a "perfect storm" of supply and demand for farm gate beef prices is brewing, with European Union buyers shy of committing to UK meat orders over fears of no-deal Brexit tariffs.
Weather, people feeling poorer, negative publicity about meat, and changes in retail strategies were all potentially playing a part in a collapse in farm gate beef prices, said BMPA chief executive Nick Allen.
With EU retail contracts falling, the UK could be looking at a structural and long-term decline in farming capacity, he warned. "A sense of panic is now gripping the meat industry as exporters see our government frighten our continental customers with uncompromising threats of a no-deal Brexit," he said.
Mr Ellis agreed there had been a "serious impact" on the market - although he isn't convinced the culprit is Brexit.
"We are in a period of crisis," he said. "The trade is very, very difficult, many cattle being sold well under cost of production. Indeed it would be fair to say the demand is at its lowest level since BSE."
The price drop is due to a number of factors, including that cattle are generally larger this year due to better growth rates.
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"It is a complicated issue and in my opinion Brexit is probably more of an excuse than a reason," said Mr Ellis. "The British meat industry will end up at the sharp end - lamb and beef particularly so being the red meat trade - but it really does come down to major wholesalers controlling the meat industry and being able to reflect the price in that direction."
He added: "In my opinion the larger beef lots will get larger which is detrimental to the smaller country farms where mixed farming is so vital for the maintenance of the British countryside we also enjoy in East Anglia."
Mr Crichton said until the Brexit no-deal situation has been confirmed the UK livestock industry was "essentially looking at a brick wall rather than being able to see through it".
There are currently around 5m pigs in the UK, of which 400,000 are breeding sows housed on roughly 10,000 pig farms with an estimated 90% of output coming from 1,000 assured farms, he pointed out. Ten large corporate companies account for 30% to 40% of the breeding sows in the country.
"As far as pigmeat exports are concerned, the UK exported 320,000 - 350,000 tonnes of pigmeat in 2018, just over half of which went to the EU comprising a high volume of cull sows," he said.
Lower value frozen products tended to be exported to third world countries, and this export activity had lifted since the recent catastrophic outbreaks of African Swine Fever in China and other countries.
"There is a great deal at stake if Brexit is badly managed and more challenges than opportunities with the loss of over 500m potential consumers throughout the remainder of the EU and very little time to create new markets of any significant volume to replace them," he warned.
Although the UK is a net importer of pork to the tune of around 55%, prices could also go up if the pound continues to weaken, he predicted, and a UK government keen to appeal to the electorate through cheap food policies and lower tariffs could attract cheaper imports from countries like the US, Brazil and Canada.
Unless alternative arrangements can be agreed between now and October 31, sow meat exported to the EU mainland could be subject to tariffs in the region of 48p/kg - almost half their value. This would effectively come off the price being paid to UK pig farmers, and beef, sheep and poultry sectors would face similar problems, he predicted.