Wednesday, 9 March 2016

How beef and lamb exports add value to the sector

Last year was undoubtedly a challenging one for beef and lamb exports, but there were positives to illustrate their value. With newly-published export figures for 2015, this week’s guest blogger, AHDB Beef & Lamb export manager Jean-Pierre Garnier, takes a look back at last year and ahead to what the future holds.

Looking at the beef and lamb export statistics as a whole, 2015 will be remembered as a year of challenges, with beef and sheep meat exports down on 2014 levels.

There is no doubt that the strength of Sterling against the Euro had an impact on the beef trade, from both an import and export perspective. Beef shipments were back again in December, contributing to an 11 per cent fall in as a whole in 2015, compared to 2014.

While trade to Ireland and France held up well, a significant drop off in volumes of cow meat exports to the Netherlands fuelled the fall. The majority of the UK’s trade to the Netherlands is made of fresh/chilled shipments, with carcases accounting for more than half of these over the previous couple of years. Last year carcase shipments accounted for just over a quarter of the trade to the Netherlands.

However, the importance of exporting more cuts than carcases cannot be overstated in adding value and helping to maximise returns throughout the supply chain. It’s a strategy we have been pursuing for some time and is paying dividends in value terms. Beef cuts accounted for 86 per cent of exports last year, compared to 75 per cent in 2014. The average value per tonne of all exports last year was £3,400. For fresh/boneless cuts it was £4,200 per tonne, compared to just £1,800 for fresh/chilled carcases. The benefits are clear to see.

Another cornerstone of our exports work is to identify and develop markets for beef and lamb products for which there is little or no domestic demand – namely fifth quarter. The strategy identifies markets for fifth quarter, where it attracts greater value and maximises carcase utilisation. Last year, for example, volume exports of beef offal were up 8.1 per cent on 2014, with a 26 per cent increase to non-EU markets. Shipments of sheep offal rose 36 per cent with a near threefold increase to non-EU markets. Volumes to South Africa and the Ivory Coast, where we have conducted trade missions in 2012 and 2013, both showed significant increases for beef offal, again underlining the importance of our approach.

The strength of the Pound impacted on farmgate prices of lamb, with prices in Euros stable year on year. Our exports in Europe progressed satisfactorily whilst we had a torrid year in the Far East, with lower prices and access difficulties. Altogether, we estimate that the value of our sheep meat exports is down two per cent against 2014, with the fall of low value commodities to the Far East compensated by higher value exports to the EU.

Of course, another issue which affected sheep meat exports last year in relation to sheep meat were farmer protests in France, mainly in July.

Looking ahead, with an anticipated weakening of the Pound against the Euro, the outlook for exporters in 2016 is much more positive for high-value exports to the EU and Switzerland. We will continue to drive forwards with our strategic approach and fly the flag for our products via trade missions, overseas exhibitions, events and supermarket promotions. Our aim will be to build on the success of last year to continue to compete in what is a volatile global market, but one which also presents huge opportunities.
 
Further information on beef and lamb exports and imports can be found here.