Food price inflation and cost of living increases in the UK could be cutting consumer demand for beef and causing a fall in imports.
According to AHDB, the UK imported 16% less beef in August compared to the same month last year, with volumes from Ireland, the biggest source nation, down 27%. While there were increases from Argentina and Germany, the levy board said there were ”notable year-on-year decreases” of between 24% and 41% for imports of beef from the Netherlands and Poland.
Nick Allen, CEO of the British Meat Processors Association, said the falling imports were not a surprise due to a “significant drop in demand” for beef in the UK.
“Supplies at home are quite tight but holding up, hence the fall in imports,” Allen explained.
Consumer price inflation in the UK hit another 40-year high of 10.1% in September, with Office for National Statistics data showing rising food prices as key to the overall CPI increase.
Prices of food and non-alcoholic beverages went up by over 14% last month after a 13.1% jump in August, the ONS reported.
Kantar data for August showed prices for roasting beef and beef steak up 12% and 10.2% respectively on last year, with sales down by around a fifth for both.
The cost of living crisis has prompted shoppers to look for cheaper food, according to findings published last week by Waitrose, which said shoppers were “being more mindful of their grocery budgets and shopping around for more offers”.
Waitrose said sales of cheap meat and related products, such as spam, fish heads and ox cheek, were up significantly.
But demand for beef would likely recover, according to National Beef Association CEO Neil Shand, who said the trade numbers should be read with recent market distortions in mind.
“2019 was the last normal year,” Shand said, adding that demand and trade had been disrupted by lockdowns. For the first eight months of this year, UK imports of beef were up between 4% and 6.1% on 2021 and 2020 but “remained below pre-pandemic imports”, according to AHDB.
But Shand added that as UK demand for beef revives, there would be a need for more imports unless the government intervened.
The cost of farming in the UK has surged over the past year due to rising prices of energy, fuel, fertiliser and transport, with The Andersons Centre, an agriculture consultancy, in August putting so-called agflation at almost 24%, far higher than inflation in other sectors of the economy.
“Unless we get some direct support from government, and quickly, UK suckler cow numbers will continue to decline, and the need for imports will increase,” said Shand, whose NBA estimates the UK to be “75% self-sufficient in beef”.
But while demand for beef in the UK has fallen, exports of British beef have climbed, suggesting strong demand for the meat in other markets as the value of the pound falls and after the UK regained access to the US market last year.
“Shipments of fresh and frozen beef to the EU grew year on year, bolstered by a weakening pound as well as a return to normalcy of trade following Brexit,” AHDB said. “Trade with the EU was up 1,370 tonnes on August 2021, and within this uplift, most notably France saw a 65% growth on August last year, and the Netherlands saw an uplift of 40%,” the board added.
“Global demand for beef has increased,” Shand said.
No comments yet