Summer Trading

This summer, with meat import shortages expected to push domestic demand and prices, suppliers ranging from butchers to supermarkets, have a sun-kissed opportunity to take advantage of a bull market.

SUMMER IS a key trading period for meat suppliers, butchers' shops, supermarkets and catering outlets alike, offering a wide range of opportunities beyond the barbecue market.

After a tough summer for suppliers in 2005, import shortages are expected to lift domestic demand and prices, particularly in the beef sector. According to MLC economist Duncan Sinclair, a tight EU beef market is expected to prevail over the season, largely as a result of disease-related import restrictions applied to Argentine and Brazilian produce. As a result, prices have been steadily rising across the EU and, coupled with the return of British beef exports, could prove beneficial for UK firms. The restrictions are not likely to be lifted before late summer for Brazil and September for Argentina.

"The biggest challenge will be sourcing steak supplies this year so ultimately a higher price will apply," says Sinclair. On the domestic front, the return of over 30 months beef is adding 5,000-6,000 cows per week to British production, "so we shouldn't lose sight of the fact we'll have more supplies to play with."

Other factors likely to impinge upon supplies include weather, with last year's hot bursts having a negative effect on stock. Further, exchange rates will also have an impact on pricing in all the meat categories.

In the sheep sector, Sinclair says production has held up remarkably well in the first quarter despite the 4% decline in the breeding flock noted in the December census. Supplies are expected to be down, although a similar decline in Irish production is expected to offer opportunities in Continental markets.

The end of the beef export ban could prove beneficial for lamb and beef trade as "exporters can send beef and lamb together instead of having to fill a wagon with lamb," says Sinclair.

Domestic pig production, meanwhile, declined slightly year-on-year in the first quarter of 2006, with the national breeding herd continuing to contract. According to BPEX, however, improved replacement levels and reduced sow culling rates are resulting in a stabilisation of the breeding herd. Improvements in sow productivity are also adding to the British industry's efficiency, with availability over the summer expected to be relatively on par with 2005.

Poultry production in the first quarter fell 7%, according to Defra statistics, with broiler production down 6% in the same period. Avian flu appears to have had little impact on sales to date, thanks to effective communication of the minimal risk from eating poultry.

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