UK beef prices set to rise
demand for Britain's cheaper meat is expected to raise prices by up
to a quarter.
British beef exports across Europe have been restricted since the height of the BSE scare, more than 10 years ago. And while cattle farmers were unable to secure export markets for their meat, supermarkets benefited from the reduced competition, driving prices down to artificially low levels.
Most farmers now sell below cost price, with British premium beef - skinned and cleaned - costing £2 (€2.87) per kilo at wholesale. But the current European average is £2.40, according to Duff Burrell of the National Beef Association (NBA).
Now Burrell thinks UK premium beef prices could rise to around £2.50 per kilo when the export ban is officially lifted by the European parliament on May 2, and ratified in Britain on May 3.
And with a beef deficit across much of Europe, many suppliers have already placed orders with British abattoirs, which will impact supply and push up prices.
Infact, the NBA expects the removal of export restrictions to bring immediate substantial price hikes for culled cows and premium meat, as open markets "do not allow such wide price differences."
Across the board price rises for meat, carcasses, live exports and beef products are predicted.
"It is inevitable that the UK cattle average will quickly assume an EU level once export links to the higher priced European markets are established," Burrell said.
The Italian prime beef average price is £2.57, and Italian buyers are already talking to UK traders keen to break the supermarket stranglehold on price and margin.
"On top of that Spanish and Portuguese cattle are levelling out at £2.35 and the French average is £2.31," he said.
"In these circumstances it is impossible for the 12 per cent, 15 per cent, even 30 per cent discount between UK prices and those elsewhere in the EU to be maintained."
Burrell explained that the differentials on cow beef (carcasses) are even greater.
"Even though our own average is approaching a very welcome £1.40 deadweight standard quality, Dutch cows are making £1.67 and the French average has hit £1.87 - all of which points to a further substantial lift in cull cow prices, once sustained export traffic to these higher priced markets is established."
The ban on the export of UK beef was originally issued in March 1996, due to the high incidence of BSE cases in the UK at the time.
In 1999, the ban was amended to allow de-boned beef and beef products from the UK produced under the date-based export scheme (DBES) to be exported.
Under the DBES, the Britain could export beef and products from cattle born after 1 August 1996, subject to a series of strict and limited conditions. But in practice, the DBES did not result in the export any significant amount of UK beef.
The European Commission recommended removal of the embargo on the basis that the UK has fulfilled the conditions laid down by the Commission in its July 2005 plan to ease controls throughout the bloc as BSE cases fall.
Once the proposal is adopted and published in the Commission's Official Journal on May 2, the UK will be able to export live cattle born after 1 August 1996, and bovine meat and products produced after 15 June 2005, under the same terms as other member states.
