Coupled subsidies paid directly on the backs of beef animals, some as high as £310 per head, were scrapped on December 31. This means domestic supply security depends on farmers overcoming this handicap by cutting costs and earning more from the market.
The latter is not in their hands, and after they have increased efficiency by 20-25%, price lifts in the region of 25-30% will be needed if anything like current production is to be maintained.
The most influential retailers argue that competition from other meat proteins and discounters makes price inflation difficult.
However, they must realise that if farmers are not paid more for cattle, then domestic supplies will quickly dwindle.
Will this matter? Can they bring in other beef, just as good, from elsewhere?
Not according to the most recent global analysis. It says retailers throughout the EU will find it difficult to drag in more imports and they should encourage domestic production while both cattle and farmers are still on the ground. Among the reasons for this are the difficulties forced on importers by EU quotas, tariffs and tough processing standards.
On top of this, ever stronger demand in South East Asia, Eastern Europe and Russia is mopping up increasingly tight world surpluses.
And if EU production should drop by 25%, or two million tonnes, which is likely if ex-farm prices remain as they are, even South America, which until now has been regarded as a limitless source for top-up, could not fill the gap.
It could require 40 million extra cattle to produce two million tonnes of top cuts for EU markets. And even if these animals were found, who is going to buy the balance?
Faced with having to pull in such quantities in the face of currency, political or disease problems, UK retailers are bound in the end to realise that home-produced is many times more secure. So it would be easier if they accepted, right now, that the only way forward is to pay enough to keep UK farmers in business.
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