MLC OUTLOOK CONFERENCE - Forequarter imports could suffer - MLC

The economist outlined the likely changes the industry would face in light of the ending of the over-thirty-month scheme (OTMS) and the re-opening of export markets.

Mr Sinclair gave a synopsis of how the UK beef sector had fared in recent years including the fact that prime cattle supplies were estimated to have risen by almost one per cent in 2005 to 2.23 million head and prices for the year were up 1.7 pence or one per cent to 187.9 pence per kg dw.

He said, in the year to October, imports fell by 18 per cent largely due to reduced trade with the Irish Republic. However, the proportion of imported beef sold at retail level averaged 24 per cent in 2005 compared with 19 per cent in 2004.

Looking ahead to 2006, Mr Sinclair said an estimated 535,000 cows were forecast to re-enter the food chain producing 155,000 tonnes of beef.

He said with an extra 10,000 cattle a week to process for the food chain, some displacement of imports of forequarter meat, in particular, destined for the retail and food service sectors was expected.

He said the Irish Republic was the country likely to be most affected by the OTM rule change.

The EU-25 net import requirement is set to rise to 350,000 tonnes in 2006 after the OTM rule change in the UK is taken into consideration.

Prime cattle supplies are forecast to fall by over four per cent in 2006 to 2.13 million head.

"This is largely associated with a decline in retention of pure dairy bull calves for beef production following the removal of the Beef Special Premium," Mr Sinclair said.

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