Retailers will probably have to buy increasing quantities of beef from importers over the next few years. The British industry's production capacity is likely to decline faster than consumption despite the possibility of more demand erosion if consumer confidence here is weakened by the BSE crisis on the continent. This warning of a tighter domestic supply coincides with claims of an imminent shortage in milk, and is attributable partly to the same production constraints. Nearly half British beef output is a by-product of milk production, and the national dairy herd is shrinking. Dairy cow numbers could fall almost 20% over the next five years after dropping by nearly a third since milk quotas were introduced in 1984. Meanwhile, the British specialist beef suckler herd also seems likely to contract as a result of subsidy changes imposed as part of EU farm policy reform. There is also no longer any beef left in this country's intervention stores. MLC beef economist Duncan Sinclair is pointing out how events in the EU cattle sector have distracted attention from changes in the UK's meat supply chain that appear certain to increase dependence on imports. {{MEAT }}