Written by Agriland Team
If I was a betting man, which I am not, I would take a serious punt on UK beef prices strengthening significantly over the next five years.
I make this prediction on the back of one very obvious fact: Since leaving the European Union (EU), the UK has had the absolute freedom to develop its own farm support policies.
We now know the direction of travel this is going to take; over the next five or so years, direct payments to British farmers will be phased out, to be replaced by environmental support grants.
The reality here is that planting trees does not put money in your bank account. Like their Irish counterparts, British beef farmers have been heavily reliant on the single payment, simply to get by.
So if this is removed from them, then they must look at other alternative income streams. In other words they need to get better prices for their produce.
Beef prices in shops
I sense that the coming months will see organisations like the National Farmers’ Union (NFU) embarking on a sustained campaign to get beef prices up in the shops.
And, in truth, the retailers will have to play ball with them. No doubt, the powers that be will use the Red Tractor farm quality assurance scheme as the ring fence mechanism to ensure, as they would see it, that only British beef producers get the direct benefit of any price increase that is injected into the system.
But, as the old saying goes, a rising tide floats all boats. So if UK beef prices start to take off, the Irish beef industry will benefit accordingly.
The UK is only 86% self sufficient in beef. Irish beef is well recognised and well accepted in that market. Moreover, UK retailers and meat wholesalers view Irish beef as having an exceptionally strong heritage.
Significantly, the NFU is already starting to push the line that ‘inferior’ quality beef should not be allowed into the country on the grounds that it will only erode the position of British livestock farmers.
It is imperative that Irish beef is not targeted for such criticism. The need for the Irish Farmers’ Association (IFA) to develop the warmest of relationships with all of its UK counterparts is obvious, given what’s coming down the track.
The need for Bord Bia to actively promote Irish beef on the British market during the period ahead is equally evident.
Beef prices and consumer demand
Finally, I need to address the issue always flagged up by many farmers when retail beef prices are discussed. The point in question centres on this strongly-held view that consumers are not prepared to pay more for food in the shops.
What absolute rubbish! The reality is that food prices have not kept pace with inflation for the past three decades or more. If farmgate beef returns had kept pace with cost-of-living increases, farmers would be getting around €7.00/kg for their cattle today.
Food has never been cheaper in the shops, in real terms, than it is today.
As far as I am aware, all the Irish beef processers are privately-owned businesses. However, if it were the case that they were publicly-listed operations, the purchase of a few shares would seem like an attractive option… that’s assuming my predictions on the future shape of the UK beef market are valid.
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