Stable Underlying Prospects for English Beef
22/04/05

English beef producers can look forward to a year of underlying market stability in 2005, according to the latest quarterly forecast from the English Beef and Lamb Executive (EBLEX) updated with the most recent year-end national census figures.

However, they must structure their finishing to give themselves the greatest flexibility to minimise their exposure to any short-term market fluctuations resulting from the reintroduction of older cattle into the food chain.

The official December 2004 census survey figures reveal a continued annual decline of around 1.0% in the overall UK beef breeding herd, a fall of almost 2.5% in dairy cow numbers only being partially offset by a welcome 1.8% increase in the beef cow population.

With dairy margins remaining under pressure and the new Single Payment Scheme concentrating minds, a further reduction in the dairy herd - which continues to be responsible for producing around half of annual UK beef slaughterings - appears inevitable in 2005. SPS uncertainty further seems likely to prevent any sustained suckler herd increase.

The national statistics also show prime cattle slaughterings in 2004 increasing to 2.21 million head - almost entirely as a result of higher disposals towards the end of the year. At the same time, the number of young cattle other than in-calf heifers on-farm declined. As a result, prime cattle supplies are forecast to fall by 1.5% to 2.18 million head over the year.

With UK beef consumption expected to remain at over one million tonnes, EU production likely to fall again in 2005 and serious constraints seen over import availability, the underlying 2005 English beef market is considered notably stable.

The EFSA Scientific Panel on Biological Hazards' recent reaffirmation of the case for the UK to be classified as a moderate risk BSE country is undoubtedly encouraging for an early resumption of bone-in beef exports. It remains an industry priority to try and get the resumption in exports at the same time as the OTM rule change takes place. However, it remains a possibility that there may be a time gap, causing short-term market instability.

Under these circumstances, EBLEX strongly advises English producers to structure their summer rearing and autumn and early winter finishing regimes carefully to minimise the number of prime stock that have to be marketed over this potentially higher risk period.

Specifically, it suggests producers plan to finish stock earlier, ahead of the OTM rule change wherever possible, taking advantage of the improvements in carcase quality as well as reductions in costs this is likely to bring. Equally, they should build sufficient flexibility into their finishing to delay the marketing of younger animals until after the first flush of older beef re-joins the market, if conditions dictate.