UK red meat producers worried about deal with Australia

A free trade agreement that is about to come into force between Australia and the UK could pose some dangers to the red MEAT sector. According to BMPA analysts, the problem lies in the cost of imported meat. To measure the impact of an increase in Australian beef imports, one must look at value, not revenue, the association said in a press release.

“As an example, a 20-foot container of 17,000 kg of beef can represent the meat of just 60 animals. A similar batch, containing only boneless fillets, comes from more than 1,000 animals. If it were fillet steaks, this figure could be three times higher. It's not about the amount of meat by weight, it's about the amount of high-quality, expensive cuts that will have a disproportionate impact on the market,” warns Peter Hardwick, BMPA trade policy adviser.

“The key to understanding this lies in how the value of each animal is created. Products such as ground beef, low-cost cuts, although they make up the bulk of all animal meat, are the least profitable, and in some cases, are sold at a price below cost.

Value and profit come from the cost of high quality cuts such as tenderloin, steaks and fillets. Without these more expensive products, beef production, no matter where in the world it occurs, would be unsustainable.

Sustained competition from overseas imports for products that are a lucrative component of UK meat production will inevitably affect both processors and farmers, forcing some of them out of business and weakening the UK's domestic food security. It is also likely that this lost trade will not be fully replaced by an attempt to compete in EXPORT markets with countries such as Australia,” says BMPA.