Europes beef stockpiles threaten ruin for some
By Robert Harris and Philip Clarke
RAPIDLY rising stockpiles of beef across Europe after Russias economic collapse are threatening farm gate prices and will ruin many European traders.
Recent attempts by Brussels to cut stocks look doomed to failure, industry experts agree. Russia imported 462,000t of EU beef last year, half the communitys total exports. But trade has since ground to a halt.
Brussels response was to reduce export costs by raising aid for beef exports by 8% for male animals; the first time in over a year rates have gone up. Forequarters have been raised by 27%.
The move is unlikely to have much impact on volumes. “Beef literally has to cost nothing for it to be shipped to Russia at the moment,” said an MLC spokesman in Brussels.
UK beef producers are not affected directly, though exports from other member states looking for a home could pressure prices, said Duncan Sinclair of the Meat and Livestock Commission. “It is another shadow overhanging an already well supplied market.” Intervention may be the only escape route, he added.
John Brook, managing director of French meat trader Sogeviandes, agreed. About 60,000t of beef has already been stockpiled since Russia shut up shop, and the heap is growing by 10,000t a week. “Export aid is not going to help us move 1kg more to Russia. It has also devalued hindquarter stocks cleared by customs by $180/t.
“I do not understand why UK farmers are looking to access Continental markets,” Mr Brook told a recent Agra Europe conference in London. “Our primary market has been blown into economic chaos, and we are sitting on a pile of beef that is virtually unsaleable.”
Pig, poultry and dairy markets will be similarly affected, warned farm commissioner, Franz Fischler, in a recently published report on the subject.
Russia has become the EUs second largest market after the USA. Last year sales hit Ecu5.4 billion (£3.8bn), including 427,000t of beef and 340,000t of pigmeat.
“The balance of European markets is dependent on exports to Russia. A reduced demand will have a substantial impact on Community prices.” For beef, in particular, with intervention stocks already at 580,000t, the collapse could be on a par with the BSE crisis.