Wednesday, 21 December 2011

Tidings of good fortune for English beef and sheep meat

As 2011 comes to an end, it’s very encouraging to be able to look back on a year of vastly improved fortunes for English livestock producers, with prices reaching unprecedented levels for both sheep and cattle.

Robust domestic demand combined with strong export sales resulted in the R4L steer price breaking through the 300p per kg barrier in early April. Ongoing tight supplies on the global market, together with the recent opening of 37 non-EU export markets, contributed to continued strong demand, and by early December the price reached 346p per kg.

Overall cattle slaughterings have been higher in 2011 than year earlier levels, however numbers have fallen back as the year has progressed, with the most recent figures showing that October throughputs were 6% lower on the year.

Strong demand for beef on the export market resulted in UK beef shipments increasing by 36% year on year in the January to October period. Although the EU remains the leading market for our beef, exports to non-EU countries have increased by two thirds in the 10 month period.

Looking ahead to 2012, supplies of slaughter cattle are expected to remain tight. Firm demand on the continent as well as the growing number of new markets is expected to keep export demand competitive. This combined with reduced volumes of imported fresh and frozen beef throughout 2011 and in to 2012 means that the outlook for UK beef production in 2012 is promising.

A buoyant export market in 2011 has also resulted in record prices for sheep producers, with the average SQQ lamb price reaching 260p per kg at auction at its peak in mid-May. New season lambs grew well throughout the dry spring and large numbers of spring lambs were encouraged on to the market in May and June by the prevailing high prices.

Slaughter statistics show lamb numbers in June were 10% higher than year earlier levels, applying some downward pressure on the price in line with the seasonal trend. However, the SQQ remained ahead of year earlier levels throughout the summer and autumn months, averaging 192p per kg in November and firmed further in early December.

Strong demand has led to good growth on the EU and wider export markets in 2011, with overall sheep meat shipments increasing by 11% in the first 10 months of the year. This increase is at a higher level than the uplift in production, meaning a larger proportion of UK sheep meat has been exported this year. In contrast, tight supplies on the global market have resulted in a 14% decline in imports for the same period, with shipments from New Zealand 17% lower than year earlier levels.

With some growth in the breeding flock, higher ewe lamb retentions in 2011, a predicted slight reduction in the lambing rate and lower adult sheep cullings, overall sheep meat production for 2012 is likely to be slightly lower than 2011 levels.

We can’t afford to ignore the situation in the Eurozone which could, of course, have an effect on the fortunes of the beef and lamb sectors. The market is set to see greater volatility which, as a rule, is not great for business. However, ongoing work in non-EU markets and the continued production of high quality beef and lamb puts us in a stronger position than other countries in the international economic storm. With global supplies remaining tight and demand increasing, it is very likely that demand for our products will remain robust. So hopefully our beef and sheep producers can enjoy a little festive cheer!

Wednesday, 14 December 2011

Landscapes without Livestock? ‘Too many people miss the silver lining because they’re expecting gold’

Let’s remove or reduce livestock from England’s countryside and we’ll save the planet! So there you have it. Simple. That’s that troublesome global environmental issue taken care of.

For some time the beef and sheep sector has been demonised by some pressure groups with calls to reduce meat eating to help the environment. The domino effect dictates that it would ultimately lead to a reduction in beef cattle and sheep numbers.

Ironically, at EBLEX’s recent annual conference, one delegate astutely pointed out that some of the very same people who knock the industry had moved to his neck of the woods because the landscape is so appealing. And the reason it’s so appealing? Wait for it. Exactly, the land is managed by the very livestock they deem so detrimental.

Now of course everyone is entitled to their opinion on the subject but the debate needs to be balanced. With this in mind an EBLEX has commissioned an independent report examining what could potentially happen to some of England’s most cherished landscapes if beef cattle and sheep were either removed or their numbers significantly reduced through a drop in demand.

'Landscapes without Livestock' has been produced by Land Use Consultants (LUC )with input from farmers, ecologists and landscape specialists and adds considered, expert evidence to the debate about the beef and lamb sector and its positive impact on the environment.

After identifying five distinctive environments in accordance with Natural England’s National Character Area descriptions and Defra’s agricultural survey, striking panoramic photographs were taken to illustrate the status quo. Photomontages at years 3, 10 and 30 have been produced to highlight the visual impacts of change at each location if livestock were no longer there, accompanied by narratives for each landscape to set out the ‘story’ of future change.

So, what has it unearthed? Well, it’s said that ‘simple solutions seldom are’ and this certainly appears to ring true with the argument that by simply removing or reducing livestock from England’s landscape, the environment will be all the better for it. In a nutshell ‘Landscapes without Livestock’ has revealed that simply cutting livestock numbers will have knock-on effects which will themselves have a negative environmental impact - lowland wet grassland to drained and intensively cropped arable land on Romney Marsh, and open grass and moorland to wild fire-threatened rank grassland and scrub on Dartmoor. The impact is clear to see.

All too often much is made of the negatives when discussing the beef and lamb sector and its impact on the environment at the expense of the many positives. It seems that when looking at the current numbers of livestock in the landscape, to coin a phrase, ‘too many people miss the silver lining because they’re expecting gold’.

  • The report can be viewed by clicking here.

Wednesday, 7 December 2011

Breaking the economic pain barrier in Olympics year and beyond

Economic pain, more spending cuts, a one-in-three chance of recession in 2012. Yes, the Chancellor’s Autumn Statement wasn’t exactly the tonic to get us all in the festive mood. But before we all dive for cover from the Four Horsemen of the Apocalypse galloping over the horizon, there are some potential positives for the beef and sheep sector.

The Government will be launching a food and drink action export plan next month. ‘So what?’ the cynics may say. Well, the real nuggets are that it will reportedly include development of a cross-Government strategy on removing animal health trade barriers in key markets such as China and Russia and introduce steps to reduce obstacles to UK food exports. Certainly a step in the right direction and one which underpins EBLEX’s ongoing commitment to developing export opportunities for UK beef and lamb. In addition, a summit will be held in March 2012 to boost innovation in small agri-food businesses.

Both Russia and China are huge potential markets. The importance of securing an export certificate to China cannot be overstated but the process is both lengthy and complex. BSE’s legacy continues to present a challenge but EBLEX has been working to develop market access, with a recent delegation to China and, even more more recently, participation in a meeting with five top vets from the Henan Provincial Animal Husbandry Bureau. At that event, questions were pointed towards China becoming more self sufficient in beef and independent from imports from Japan, the USA and Canada. This would, however, reportedly require production in China to more than double. If an export certificate for the UK could be secured, the opportunities speak for themselves.

As for Russia? Next week (December 15th-17th) will see unanimous political endorsement of Russia’s World Trade Organisation (WTO) accession at the 8th WTO Ministerial Conference. Russia’s accession is especially important for the EU. It is the EU’s third largest trading partner after the USA and China, with an 8.6% share of EU trade in 2010. It is also believed that Russia’s entry in the WTO will have an estimated value for the European Union of €3,900million.

The EU is the second largest beef exporter to Russia but again the UK can’t benefit from it due to a continued BSE-related ban.  As such, part of EBLEX’s ongoing export strategy to secure new market access to optimise returns for producers and processors in England, is to work to open the Russian market. As we’ve said before, resuming beef exports to Russia could be worth around £115m to the UK in the first three years and that’s based on a conservative 2% market share.

Inevitably the majority of post-Autumn Statement headlines have been all doom and gloom - understandably so for many. The food and drink action plan could however give us cause for optimism, not least by building on and support the hard work the beef and sheep meat sector has already been doing to help drive exports forward as we move into 2012.

To read more about EU trade relations with Russia click here.