Meat in Britain THERE IS LESS BEEF BUT MORE OF EVERYTHING ELSE

Press, Volume CIV, Issue 30815, 29 July 1965, Page 16

Meat in Britain THERE IS LESS BEEF BUT MORE OF EVERYTHING ELSE

IBy the Commodities Editor of the "Financial Times"] (Reprinted from the "Financial Times" by arrangement)

Hopes that the shortage of beef for world trade might ease a little in the second half of this year are now looking a little premature. A critical situation is developing in the Argentinian beef industry which may seriously disrupt shipments from what is traditionally the world’s largest exporter.

Last week it was announced that the two big United States-owned “ frigorificos ” (meat packing stations) operating in the Argentine, Swift and Armour, had been forced to lay off most of their staff for 3U days.

It was recently reported in the “Meat Trades Journal" that last year the frigorifico industry lost nearly £lom and is losing money at an even faster rate this year. The difficulties of the industry stem largely from the high internal demand for beef which has pushed prices to the point where it is uneconomic for the frigoraficos to export on to the world market. Meatless Days Last week the Government announced that it was taking extra steps to try to channel supplies into exports. Friday and Saturday are to be "meatless days,” for the Argentinian and cattle of a certain weight are to be bought only for export. But the meatless day system has had little success this year, and cattle breeders have been under considerable difficulties in maintaining over-all supplies. They have been battling against a biblical series of disasters, including drought, foot-and-mouth disease and an epidemic of rabies-spreading vampire bats. The result of all this has been that Argentine meat exports in the first five months of this year were down by 23 per cent compared with the same period of 1964, and recently the main packers announced that they would have to reduce shipments to the chief export markets by a further 30 per cent. The Minister of Agriculture has said that there will be a greater and steadier flow of cattle to the market next spring (November). Meanwhile, the two United States companies involved in the crisis have announced that if the Government cannot solve the industry’s financial difficulties by the end of the month, the shutdown of their plant may be permanent. So on the most optimistic reckoning shipments from the Argentine, which accounted for a third of world beef exports in 1963, will be down by at least 120,000 tons this year. The United Kingdom has not been as badly hit by the slump in Argentine exports this year as it was last, when there was a very pronounced switch in shipments to the Continent. Admittedly, during the first five months of this year United Kingdom imports of Argentine beef were down by nearly 20,000 tons in the first five months of the year. But the main Continental importers, Italy

and Germany, also obtained considerably less, too. Exports To Continent However, provisional figures for the first six months show that shipments to Western Germany have risen sharply. Its imports of beef and cattle, calculated in terms of live animals, amounted to 407,000 head, nearly 30 per cent, higher than in the comparable period of 1964. Italy’s imports of cattle are also up this year, although it has been obtaining less beef from abroad. In fact, earlier prophecies that the European Economic Community would require an extra 700,000 tons of beef in one form or other this year are on the way to being fulfilled. This has, of course, affected Britain. Fortunately it has been able to import more beef from Australia, in spite of the drought there, so total imports during the first five months were only down 15,000 tons. However, Britain, although a net importer, has become an important source of supply for the beef-hungry Continental countries. During the first six months of this year the National Farmers’ Union estimates that live cattle exports from this country to the Continent rose by 35 per cent, to 120,000 head. Beef exports, although they amounted to only some 5000 tons, were also sharply up. Added to this, there has been a drop in home slaughtering figures. In the January to June period 1.55 million cattle were slaughtered, a drop of 200,000 on the 1964 kill for the first six months. The total net effect on supplies of beef and veal to the home market has been a drop of 72,000 tons, taking the first five months of this year only (the latest date for which over-all figures are available).

Surprisingly, there has not been more than a slight rise in wholesale beef prices since the beginning of the year. The notable exception is Argentine beef, which is now more expensive than home produced. The main reason for the comparative stability of prices (auction prices for Grade I steers were actually down in the second quarter) seems to have been as usual, that shoppers have switched to other types of meat. Imported supplies of lamb have been higher and a higher pig population has led to more pork and bacon. Add to this an increase in the quantity

of chickens coming to tho shops, and it appears that over-all meat supplies are keeping relatively stable. But. equally, it is unlikely that there will be any sharp improvement over the rest of the year. Exports from the Argentine will go down rather than up. The effects of the drought in Australia should soon begin to make themselves felt Already cattle losses in some States are heavy. To be put against this, there are signs of an improvement in the position on the Continent Calf prices are falling and cattle numbers building up. In Britain, too, the number of cattle under one-year old has been increasing rapidly, which augurs well for the future. But this has been partly at the expense of older cattle, owing to the fashion nowadays for more' intensive feeding and younger slaughtering. This is necessarily a once-and-for-all change. The extra beef which can come from lowering the number of young calves which are slaughtered is also limited, although the use of more beefdairy crosses and better husbandry can have some effect. The only way, in fact, in which there can be a substantial rise in United Kingdom beef production is by a major rise in the dairy herd. This is both a long-term prospect and one which depends more on Government policy than on the price of beef.