Beef Expo: Good opportunity for beef producers to plan ahead

This year’s Beef Expo comes at an important time for the UK beef industry. Better beef prices, a smaller national herd, continued consumer demand for red meat and a weaker pound have all had positive effects in recent months.

The outlook remains good, giving producers an opportunity to plan for the future. Lloyds TSB agriculture managers are certainly detecting a greater feeling of confidence as they speak to producers throughout the country.

Weaker sterling throughout 2009 made UK exports more competitive. Figures from Eblex show exports rose by 6 per cent in 2009, while imports dropped by 12 per cent. The weaker pound also helped boost Single Farm Payments.

But expecting this favourable position to last long term would be unwise. There are already signs the pound is strengthening and beef has to compete for a share of consumer spend with other meats and non-meat products, while a more unpredictable climate could impact on production. Volatility is here to stay.

Global markets

Big changes to support could also be around the corner. UK Government spending is under pressure, while reform of the CAP is likely to mean less direct support. Increasingly, producers will have to rely on a global market to develop their businesses.

A growing number of producers are strengthening their businesses for the future by investing wisely in new equipment, systems and land.

Many are also investing to meet the new NVZ rules. Now is a very good time to be borrowing money with base rates at the historically low level of 0.5 per cent for more than a year.

Forecasters don’t predict any immediate increase in the base rate, but estimate it could be at 1.5 per cent by the end of 2011.

This makes variable rates very attractive, but in the longer term the cost of borrowing could rise to historic levels. Fixing interest rates is one way of mitigating this.

Lloyds TSB Agriculture is committed to supporting beef producers throughout the country as our support for Beef Expo as its major sponsor for the fourth year demonstrates.

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