Report on EBLEX meeting on beef exports

Report on EBLEX meeting on beef exports.

In 2006 some 46,000 tonnes of beef and fifth quarter products was exported from the UK against a forecast of 30,000 tonnes. At the end of 2007 around 65,000 tonnes is expected to be sold outside the UK.

These are clearly useful quantities but there are a number of pressures on the export market, a slow domestic beef trade in Italy and unfavourable currency exchange rates being among them, which have introduced a more muted atmosphere surrounding export potential than was the case 12 months ago.

Co-ordinators are now talking about a “natural “level for exports and clearly saying that expectations of a quick return to the 197,000 tonnes sold in 1995 are unrealistic.

The main sales are cow beef to the Netherlands and the Republic of Ireland and there are concerns that some of this product, which is sold bone-in, and returned to the UK bone-out, could be distorting the apparent advantage of the initial sale.

Overall 75 per cent of exports are cow beef, 10 per cent bull beef and 15 per cent steer and heifer beef. Deliveries from England account for 70 per cent of the UK tonnage and around 1,200 tonnes are being exported each week to 17 countries.

However beef from the UK is currently among the most expensive in the EU and in Italy, where butchers cows are more expensive than young bulls this year, there is resistance to the price of UK export deliveries.

Larger than usual supplies of unsold cattle in France, Germany and the Republic of Ireland, as well as high stocks in Brazil, are said to be overshadowing the EU market too.

Currently Spain is the highest paying market for heavy cows and Greece the best market for young bulls.

An increase in offal sales is seen as important and the former chief vet, Jim Scudamore, is working with the FSA to put recommendations in front of processors that will help them raise the value of tripes and intestines – some of them for third country (ex-EC) market.

Despite some exports sales most processors are paying £75 tonne for tripes and other offals to be disposed of – but of these could all be sold abroad they could be worth £840 tonne.

It is estimates that export sales have lifted cow prices by 15p deadweight but it is conceded that the impact of exports on the prime cattle price is not as high.

MLC has said there is some re-importation of boned-out cow beef from the ROPI and the Netherlands but also says that each of these markets has huge distributory outlets on a pan-EU basis and there is much greater chance of bone-in exports finding its way through these than doing a return trip of the bones are removed.

In addition to this a greater proportion of the cow beef that is being exported is bone-out.

France is still seen as the prize for cow beef sales and although export deliveries have been slow to build up they are improving.

Export opportunities in Portugal.

Portugal’s high cost domestic production does not cover consumption, consumer demand is high, and it is always looking for top up deliveries.

Export opportunities to Scandinavia.

The Scandinavian countries are only 54 per cent self sufficient in beef, there is high food price inflation, imports have risen by five per cent since 1995, and UK exporters are under open invitation to explore new sales.

Export opportunities to Italy.

Italy is the export prize. Some 80 per cent of domestic production is dairy beef and it is the biggest importer of beef in the EU – although its fragmented distribution system can create difficulties.

Unfortunately the Italian economy is stale at present, beef consumption is static, and discounts are needed to gain entry.

Last year the Republic of Ireland sold 50,000 tonnes into Italy and British exporters are keen to get a share of this - particularly for steer and heifer beef.

A flagship UK product packaged as “Perfect Beef Steak” is being rolled out to spearhead this effort. It is being produced by two suppliers and distributed through two retail chains.  The steaks are taken from 20-24 month old animals and subjected to careful maturation.

It is probably a more important product for the UK industry than bull beef, which is a commodity product and traded on price.

The restoration of strong Italian demand for UK steer and heifer beef is a priority target.

National Beef Association
June 12th 2007