Implied promise of relatively modest changes in supply and prices Confused but relieved, British beef processors and cattle producers are trying to come to terms with the new EU reform package which now seems likely to cause less market disruption in the short to medium term than first reports indicated. From retailers' perspective perhaps the main significance of the deal thrashed out between agriculture ministers and European Commission officials on June 20 is its implied promise of relatively modest changes in supply and prices, reflecting the politicians' confidence that demand is stabilising. This explains, for instance, the initial contradictory reports of the ministers' decision on intervention. Although the maximum quantity authorised to be taken into store is being increased from 350,000 tonnes to 500,000 tonnes, the higher limit is for only one year rather than permanently as the Commission had proposed. Sharply reduced beef consumption in several major EU internal markets and blocked exports following the BSE scare late last year led to a backlog of cattle building up on farms, and it is assumed the market will become overloaded in the second half of this year as these animals are sent for slaughter. However, evidence of consumption recovering in the worst hit markets, especially Germany, and the reopening of some export outlets including Russia convinced a majority of the agriculture ministers the overall trade was regaining its balance and draconian measures were therefore unnecessary. {{M/E MEAT }}

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