19th August 2016: Issue 32. NBA DIARY 3 Concern Over Animal Feed Mislabelling in Ireland
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1 National Beef Association Newsletter THE INFORMATION AND OPINION IN THIS NEWSLETTER IS DISTRIBUTED FOR THE USE OF NBA MEMBERS. THE NEWSLETTER IS PUBLISHED BY NATIONAL BEEF SERVICES LIMITED. The Mart Centre, Tyne Green, Hexham, Northumberland, NE46 3SG Tel: th August 2016: Issue 32 NBA NEWS: Government guarantees same level of farm subsidies until CCTV in Slaughterhouses is Cost Effective and Feasible, say Experts 7 SBA NEWS: Call for funding guarantee to be extended 3 Beef and Veal Exports Steady 8 NBA DIARY 3 Concern Over Animal Feed Mislabelling in Ireland NBA MARKET REPORT 4 EU Countries to vaccinate against Lumpy Skin Disease 9 9 AHDB (Meat Services) and LMC market prices 6 China renews beef trade deal with Argentina, despite antibiotic contamination scare 9 BEEF INDUSTRY NEWS: 7 Saudi Arabia opens its market to Polish beef 10 Calf Registrations Higher in 2016 so Far 7 Advertisements 11 On 1
2 NEWS AND NBA DIRECTORS WEEKLY REPORT Government guarantees same level of farm subsidies until 2020 On Saturday (August 13), Chancellor Philip Hammond announced key rural development and agri environment schemes will be given the green light alongside a guarantee on basic payments. CAP subsidies are currently worth about 3 billion to UK farm businesses. Mr Hammond said this would end the uncertainty for farmers following the UK s decision to leave the European Union. However, no guarantees have been made as to what funding will be available after Assurances to farmers expected to be set out by the Treasury include: Agri environment and rural development schemes signed or with agreements in place before Autumn Statement will be fully funded, even when these projects continue beyond the UK s departure from the EU. The current level of agricultural funding under CAP Pillar 1 will be upheld until 2020, as part of the transition to new domestic arrangements. A spokesman for the Treasury said: "As a result, British farmers will now be able to plan further into the future, and will be able to press ahead with agreements to help protect the countryside and environment." "Alongside this, key rural development schemes including the Growth Programme and Countryside Productivity scheme will also ensure the continued economic development of rural areas," the spokesman added. These schemes are funded by the European Agricultural Fund for Rural Development CAP Pillar 2, which forms part of the European Structural and Investment Funds. They are therefore expected to be covered by the same assurances the Treasury will set out for the structural and investment funds. The agricultural sectors in Scotland, Wales and Northern Ireland are expected to each receive the same level of funding that they would have under CAP Pillar 1 until the end of the Multiannual Financial Framework in Defra Secretary Andrea Leadsom said: This guarantee of funding is excellent news for our farmers and our environment. It means hard working farmers are assured of current levels of funding until 2020 and any agri environment schemes agreed before the Autumn Statement will be fully funded even when these projects continue beyond the UK s departure from the EU. I m delighted we can provide this crucial certainty and continuity to our rural communities while we develop a new approach to supporting agriculture and protecting our precious countryside." 2
3 SBA NEWS Call for funding guarantee to be extended Cabinet Secretary for the Rural Economy Fergus Ewing has called for the EU funding guarantee to be extended to cover the outstanding 360 million that is vital to the Rural Economy. Following confirmation from the UK Government that they will guarantee certain expenditure, Mr Ewing is pressing for this to be extended to cover at least 300 million of CAP Pillar 2 funding and at least 60 million of EMFF funding that is unlikely to be able to be agreed by the Autumn Statement for commitments running to Mr Ewing said: While the guarantees offered by the UK Government helped to remove some uncertainty for our farmers and fishermen, it s clear that it simply does not go far enough. EU funds provide significant benefits to the rural economy, creating and sustaining jobs often in areas where circumstances are challenging. They are a critical support mechanism for the agricultural and fishing industries. "That s why I am calling for the UK Government to go further and extend that guarantee to cover in excess of 300 million for CAP pillar 2 and 60 million EMFF funding that remains at stake. This would provide the clarity and certainty rural Scotland needs NBA DIARY Tuesday 13th September Board Meeting, Hexham Tuesday 13th September NBA AGM, Hexham Tuesday 18th October Policy Meeting, Cullumpton Tuesday 6th December Board Meeting, Hexham Entries in Red are open to all NBA Members Entries in Green indicate Meetings attended by NBA representatives Entries in Blue indicate NBA Committee Meetings 3
4 NBA MARKET REPORT (written today at 4pm) Good weather and a shortage of cattle continues to keep the finished cattle price rising as processors have emptied their chills. Cattle continue to be slow to come to market and we are seeing most processors offer special deals to consignors with good numbers available. Though we are getting excited over the slow rise in the trade, it must be remembered how low the price was earlier this year and so it was inevitable the price would rise. We are still behind last year s trade and our share of retail price is historically low. Deadweight cattle prices need to rise another 15p/kg and then the price will be getting close to a fair value for cattle. Irish cattle numbers provided by Bord Bia show that beef cattle numbers in the 24 to 36 month age category are tighter than expected and are down head compared to last year. This should mean that there will be less Irish finished cattle available in the Autumn for the British market. For the week ended the 13th August the cattle trade has continued to rise due to processor competition and we have seen the GB all prime cattle indicator strengthened another 4p on the week earlier to reach 342.1p/kg. Prices are now almost back to a price last seen in December The number of cattle coming forward in the latest week are below last year s number. At 28,700 head, estimates suggest that the number of prime cattle slaughtered was almost 1,000 head down on the corresponding week last year. The value of high specification farm assured commercial cattle remains robust and in spec R4L steers moved up in value again, strengthening 4p on the week to reach 356.8p/kg. This took prices for these types over the five year average for the first time this year. Heifers of the same specification moved up another 2p to average 355.0p/kg. The current fine weather will undoubtedly have had a positive effect on demand for some cuts, in particular those that feature on the barbeque such as mince, burgers and steaks. Nevertheless, given the supply/demand balance on the domestic market and the value of sterling against the euro reducing interest in Irish beef it looks likely that the trade will remain firm for the rest of the summer. Beef and veal exports in June recorded a steady performance. At 8,100 tonnes, shipments were up one per cent on the year. The weaker value of sterling against the euro and the dollar has continued to provide a short term boost to trade, by improving the competitive position of UK product on the global market. In the year to date, exports are now 13 per cent ahead of last year at 54,300 tonnes. The small increase in shipments in June was entirely driven by a strong trade in frozen products, particularly to Hong Kong, the Netherlands and the central African country of Gabon. Frozen shipments to Hong Kong more than doubled on the difficult trading position of this time last year. This trade is almost entirely made up of cuts of one kind or another but, while the UK has enjoyed a good beef trade to Hong Kong since 2009, it has been limited to a certain number of cuts and ages of cattle. However, looking forward, the long awaited new agreement reached at the end of last year has now come into force. It will broaden the opportunities for exporters who will now be able to export products such as burgers, beef sausages, meat balls, trimmings, strips, diced beef and bone in cuts from cattle under 30 months of age. Fresh/chilled shipments were back six per cent year on year, however, this was mainly driven by a drop off in shipments to Ireland. Higher valued boneless shipments, in the year so far, account for 70 per cent of all the UK s fresh/chilled trade; just two years ago it was under half. Given that the small increase in volume was driven by cheaper product, it did not compensate for lower prices in sterling terms. Consequently, the value of trade in June was back two per 4
5 cent on the year at 29.5 million. However, for the year to date at 171 million, the export trade is worth a fraction more than in the same period last year. Imports in June were up two per cent on the year at almost 23,000 tonnes, with shipments from Poland and Germany driving the increase; imports from Ireland were level on the year. In the first half of the year, imports are now reported to be a fraction back on last year at 128,000 tonnes. Of the main sources of UK beef and veal imports, only Poland and Germany have a positive year on year comparison. Irish imports are just over one per cent back on the year, however, accounting for around 68 per cent of all imports their market share is virtually unchanged year on year. Imports of prime cattle from ROI for direct slaughter in NI plants last week were almost unchanged from the previous week with a total of 103 head imported. This accounted for two per cent of the total NI prime cattle kill and was below the corresponding week in 2015 when 280 prime cattle were imported for direct slaughter in NI plants, accounting for five per cent of the total NI prime cattle kill. A total of 22 cows were imported from ROI last week for direct slaughter compared to 43 cows in the same week last year. Exports of cows from NI to ROI for direct slaughter last week totalled 146 head, up from 112 cows the previous week. Exports from NI for direct slaughter in GB last week consisted of 90 prime cattle and 19 cows, compared to 70 prime cattle and 13 cows exported during the previous week. The average R4L steer price in GB continues to rise, at 356.8p/kg this is a further lift of 3.8p on the week. Scotland is now at p/kg a lift of 4.1p/kg, the South had a lift of 4.5p/kg on the week and is now at 349.1p/kg, the North is steady on for the week at 360.5p/kg, the Midlands is up 2.7p/kg at 345.9p/kg for the week. Northern Ireland Steers are steady on the week to average 334.5p/kg whilst in the ROI steers are up around 5p at 323.4p/kg. The average R4L heifer price in GB is up 2.1p/kg and averaged 355p/kg. The R4L heifer price in Scotland is up 4.1p/kg at 365p/kg, Midlands are up 3.6p/kg at 352p/kg, the North is steady on the week at 351.9, whilst Southern England heifers are up 4p/kg at 349.3p/kg. Northern Ireland heifers are up around 3p/kg and averaged 334.2p/kg whilst in ROI, heifers were up a 4p at 332p/kg. For the coming week: Prices are moving up quickly and consignors with numbers are in a very strong position. In the South of England, we are seeing cattle being quoted from around 342p. The North, is seeing base prices quoted for next week in the region of 355p/kg. Scotland is seeing cattle being quoted from a base of around 365p/kg. In Northern Ireland processor, prices quoted are in the region of 329p/kg based on R4L for the coming week. Angus, Shorthorn and Hereford native bred cattle continue to attract premiums of depending on the scheme, with Angus at around 400p/kg and organic cattle are over 410p/kg. Cows remain in the region of 265p, with more for better fleshed cows with good conformation. 5
6 AHDB (Meat Services) and LMC market prices: Auction Averages Week Ending 17/08/2016 Price p/kg lw p/kg change on wk STEERS HEIFERS YOUNG BULLS COWS DeadWeight Cattle Prices (p/kg) Week ending 13/08/2016 GB SOUTHERN CENTRAL NORTH SCOTLAND N. IRELAND ROI R4L Steer p/kg change on wk R4L Heifer p/kg change on wk R3 Bull p/kg change on wk O+3 Cow p/kg change on wk All GB data in the above tables is reproduced from tables created by AHDB/LAA/IAAS For more detailed information please visit or * The above tables are unique because they are the only ones in existence that are published on a cross UK basis that carry information on all UK regions plus the Republic of Ireland. The information, which is delivered free to NBA members by , can only otherwise be obtained through AHD/LAA/IAAS (see above) and the Livestock and Meat Commission s (LMC)Bulletin for Northern Ireland. The tables should be a useful source of information to committed beef finishers across the UK. 6
7 BEEF INDUSTRY NEWS Calf Registrations Higher in 2016 so Far British Cattle Movement Service (BCMS) figures indicate that registered calf births in the first half of 2016 were up one per cent, or 17,000 head, on the year earlier at 1.59 million head. Given that this carries on the increasing trend in calf registrations seen over the past couple of years, it does have some implications for production levels over the medium term. However, bearing in mind that there have been clear indications from processors for some time that demand for heavier carcases is reducing, a trend expected to continue, any impact could well be mitigated. Despite overall numbers continuing to trend up, this year so far has seen a change to developments over the past couple of years, in that dairy registrations have been lower compared with the same period last year. Consequently, the uplift, overall, is entirely a result of increased beef breed calf registrations. If not linked to a fall in cow productivity, this could well be an early signal of decisions made by producers to exit the industry, albeit a year ago. Dairy female calf registrations were back four per cent year on year and dairy male registrations were back six per cent. Dairy male calves are traditionally finished on intensive cereal based systems before 16 months of age but, despite the better feed outlook, producers seem to have not been encouraged into retaining these animals for finishing during This development could well continue, following the decision by a major processor to downscale its procurement of young beef bulls. Beef calf registrations are up almost 36,000 head in the six month period compared to the same time last year. While Limousin genetics remain by far the most dominant for beef breed calf registrations, growth in general has continued to come from the dominant native beef types. Aberdeen Angus registrations, which dominate these types, were up four per cent on the year and have steadily increased in prevalence over the past few years. Accounting for just 14 per cent of all beef sired registrations in 2011, in the first half of 2016 they accounted for 17 per cent of all beef breed registrations. This increasing influence is a result of several production linked factors but has also been driven by demand for Aberdeen Angus beef from consumers. Hereford calf registrations were up 12 per cent on the year, they too have accounted for a greater share of the beef breed calf registration mix over recent years. CCTV in Slaughterhouses is Cost Effective and Feasible, say Experts A new report published by a team of independent experts headed by Sheffield Hallam University Professor Ian Rotherham, has found that the cost of independent monitoring of CCTV inside England's slaughterhouses is likely to cost between 150,000 and 370,000 a 7
8 year. The report's publication comes against a background of undercover investigations of English slaughterhouses, by campaign group Animal Aid. The new report CCTV Monitoring in Slaughterhouses sets out how an independent system of monitoring might be conducted, what it would cost and how it might be funded. Crucially, the report's authors who are also drawn from Cormack Economics and HEC Associates endorse the current regulatory ethos that says the cost of regulation should fall to industry and consumers, not to government and taxpayers. This endorsement will make welcome reading for Defra, the government department charged with the regulatory responsibility for the sector, and which faces substantial budget cuts. Defra Minister George Eustice has already stated that the cost of installing cameras in slaughterhouses is relatively modest'. According to the new Rotherham report: "The clear conclusion is that the current system of welfare monitoring is failing and that compulsory use of CCTV with independent monitoring is the only robust solution." His report recommends that a formulating body (governmental, academic, animal welfare or other) establishes a monitoring committee to run the scheme, which needs to be transparent, effective, and for credibility, to be independent from interference by both government and industry'. Its members would be drawn from a range of stakeholders, and would appoint staff who would be trained and supported in their viewing of footage. It recommends slaughterhouse anonymity to protect the workers and to ensure that there is no bias caused by employees knowing they are watching footage from a slaughterhouse with a poor welfare record. It also recommends close liaison with the Food Standards Agency, the body currently charged with regulating welfare at slaughter. The report's authors produce a sliding scale of staff costs that are dependent upon how much footage is monitored in a year from each of around 260 slaughterhouses in England. They calculate that, if six hours of footage is to be checked, the staff costs would be in the region of 45,900, while if 36 hours of footage is assessed, costs would rise to 283,500. The report also examines options for how these costs might be met, and concludes that on balance, we advocate the introduction of a levy per carcass'. It describes the cost per unit as minimal' Beef and Veal Exports Steady Beef and veal exports in June recorded a steady performance. At 8,100 tonnes, shipments were up one per cent on the year. The weaker value of sterling against the euro and the dollar has continued to provide a short term boost to trade, by improving the competitive position of UK product on the global market. In the year to date, exports are now 13 per cent ahead of last year at 54,300 tonnes. However, as was the case in May and in a change to the situation in some of the earlier months of this year, the small increase in shipments in June was entirely driven by a strong trade in frozen products, particularly to Hong Kong, the Netherlands and the central African country of Gabon. Frozen shipments to Hong Kong more than doubled on the difficult trading position of this time last year. This trade is almost entirely made up of cuts of one kind or another but, while the UK has enjoyed a good beef trade to Hong Kong since 2009, it has been limited to a certain number of cuts and ages of cattle. However, looking forward, the long awaited new agreement reached at the end of last year has now come into force. It will broaden the opportunities for exporters who will now be able to export products such as burgers, beef sausages, meat balls, trimmings, strips, diced beef and bone in cuts from cattle under 30 months of age. Fresh/chilled shipments were back six per cent year on year, however, this was mainly driven by a notable drop off in shipments to Ireland. Generally, the long term evolution of trade is still very positive for this segment of the market, particularly for the higher valued boneless shipments. In the year so far, they account for 70 per cent of all the UK s fresh/chilled trade; just two years ago it was under half. 8
9 Given that the small increase in volume was driven by cheaper product, it did not compensate for lower prices in sterling terms. Consequently, the value of trade in June was back two per cent on the year at 29.5 million. However, for the year to date at 171 million, the export trade is worth a fraction more than in the same period last year. Imports in June were up two per cent on the year at almost 23,000 tonnes, with shipments from Poland and Germany driving the increase; imports from Ireland were level on the year. In the first half of the year, imports are now reported to be a fraction back on last year at 128,000 tonnes. Of the main sources of UK beef and veal imports, only Poland and Germany have a positive year on year comparison. Irish imports are just over one per cent back on the year, however, accounting for around 68 per cent of all imports their market share is virtually unchanged year on year. Concern Over Animal Feed Mislabelling in Ireland The President of the Irish Cattle and Sheep Farmers' Association (ICSA), Patrick Kent, has expressed his concern following revelations of the mislabelling animal feed products. "Every farmer invests heavily in their animals and they need to be assured of the composition, the quality and the source of the ingredients of all the feeds they purchase," he said. "Many widely used animal feeds are comprised of imported and sometimes inferior by products. This is a timely reminder to feed merchants that a better option is to source locally grown ingredients. "It is also a reminder to farmers that possibly the best option for them is to buy feed from other farmers locally where possible. There is concern about the use of lower quality imported ingredients in order to make a ration look cheap." EU Countries to vaccinate against Lumpy Skin Disease The EU food safety authority (EFSA) has urged Balkan Countries such as Greece and Bulgaria to vaccinate against Lumpy Skin Disease, a viral infection that has spread rapidly via insects, to prevent further outbreaks. There have been over 200 outbreaks in Bulgaria alone since the start of the year. China renews beef trade deal with Argentina, despite antibiotic contamination scare China and Argentina renewed their beef trade deal in late July, despite a shipment of 11,000t of Argentinian beef having to be destroyed due to antibiotic contamination, It The agreement, which expired on July 23, was renewed following a visit to China by an Argentinian beef delegation, headed by the Argentine minister for agriculture. The AQSIQ agency is putting in place stricter inspections of meat imports into China for banned antibiotics such as chloramphenicol. Southern Hemisphere suppliers account for 90% of beef imports to China, while Argentina, Brazil and Uruguay, together accounted for close to 65% of grass fed beef imported into China in the first half of this
10 Last year over 40,000t of Argentinian beef was shipped to China, an increase of 110% on the previous year. Beef exports to China account for 36% of Argentina s total exports. Saudi Arabia opens its market to Polish beef The two sides have fulfilled formal requirements and agreed the terms of export, Poland s Ministry of Agriculture said in a statement. Saudi Arabia is a potentially lucrative market for Polish meat exporters, as the oil rich country is agriculturally weak, so is forced to import food. The agreement also provides Poland with an opportunity to make inroads into the whole Arabian Peninsula market. In July, Saudi Arabia s King Salman issued a decree lifting a ban on importing Polish, US, and Spanish meat. 10
11 ADVERTISEMENTS Hexham & Northern Marts hold a weekly sale of 350 plus top quality store cattle every Friday. Contact our team of Auctioneers for further details or to receive copies of our catalogues. Tel: Web: info@hexhammart.co.uk Facebook: Hexham and Northern Marts 11
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