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Australian imported flat iron steak (seamed oyster blade) in a London restaurant<\/p>\n
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MORE than two years after Australia signed its Free Trade Agreement with the United Kingdom, beef trade volumes are slowly starting to grow into both the UK and to some extent, nearby European Union nations.<\/p>\n
Local European and UK beef herds are continuing to trend down in size, putting pressure on local beef production volume. Irish, UK and European cattle prices have all gone \u2018through the roof\u2019 as a result, at least partially related to the region\u2019s \u2018green\u2019 policies initiated a year or two ago on livestock raising, that are now being expressed in cattle availability.<\/p>\n
These \u2018sustainability\u2019 measures are imposing higher costs on the European producers supply chain, pushing prices to record highs this year. (note today\u2019s second article<\/a> suggesting the EU may roll back some of its deforestation legislation).<\/p>\n For the fiscal year ended 30 June, Australian beef exports to the EU have reached 16,567t, up 45pc on the previous year, and two-and-a half times the volume seen in 2022-23.<\/p>\n Exports to the United Kingdom last financial year reached 9860t, more than double the 4594t seen a year earlier, and more than nine times higher than the 2022-23 year, when just 1025t was shipped. Value-wise, Australian beef and veal exports to the UK were worth $97.8 million in calendar 2024, more than double the previous year, eight times as high as in 2022.<\/p>\n While that sounds encouraging, the export numbers are small compared with earlier eras, when both grain and grassfed Australian beef exports under the old Hilton quota and the more recent High Quality Grainfed EU quota (35,000t) were much higher.<\/p>\n In fact the EU ranked only eleventh among Australian export customers last year in volume, and the UK, fifteenth. But both are quality markets, among the highest-paying of all Australian beef customers, on average $\/tonne value.<\/p>\n While the UK broke away from the European Union after its BREXIT vote back in 2020, most of the trading terms for Australian beef into the UK continue to function under suffocating EUCAS regulations.<\/p>\n Progress towards an \u2018open herd\u2019 model in HGP-free eligibility for Australian beef heading to the UK has been painfully slow, and remains a topic of acute sensitivity, at government-to-government and industry-to-government level.<\/p>\n Inevitably, a lot more meat would head to the UK under a more liberal and easier to manage open-herd HGP-free model, Beef Central was told by trade sources.<\/p>\n The current Free Trade Agreement between Australia and the UK entered into force in May 2023, amid breathless concerns among UK farmers that the market would be swamped with Australian beef of \u201cdubious quality, food safety and animal welfare\u201d.<\/p>\n Instead, the market has trickled along, at snail\u2019s pace until relatively recently.<\/p>\n Across on mainland Europe, Free Trade Agreement negotiations with Brussels have only recently resumed after being put on ice in 2023, and appear little closer to a resolution, despite a European visit by Australian trade minister Don Farrell last month.<\/p>\n Global tariff impacts led by the US may help promote the cause, however some big meat-producing EU member countries like France clearly have reservations about opening the bloc\u2019s markets to potential competitors like Australia. Such concerns are also holding up trade access talks with South American countries.<\/p>\n Record high UK cattle prices<\/p>\n Declines in UK beef production, much of it linked to environmental regulation on grazing land, have forced UK cattle prices to record levels this year.<\/p>\n Agriculture industry body AHDB quoted the GB all-prime deadweight average 634p\/kg in the week ending 5 July. At today\u2019s exchange rate of A$2.05 to the pound, that\u2019s the equivalent of A$13\/kg carcase weight (note: we have no way of determining standard carcase dressing in the UK versus Australia, eg kidney fat and channel fat). In comparison, a four-tooth grass ox in Queensland this week is making 650c\/kg carcase weight, and a 100-day grainfed ox October delivery 700c\/kg.<\/p>\n UK carcase prices remain around \u00a31.50\/kg ahead of the same week last year and more than \u00a32\/kg ((+A$4\/kg) above the five-year average, the AHDB said in a report last month. A 350kg prime steer carcase in the UK is worth an extra \u00a3738 on average compared to last year, the body said.<\/p>\n Cattle supply has been a key influence on the direction of the UK beef price. Longer-term reductions in cow numbers and fewer young stock moving through the supply chain has tightened availability, subsequently driving competition and contributing to price growth, AHDB said.<\/p>\n \u201cLower cattle inventories are not just a driver in the UK,\u201d it noted. \u201cThere are well-documented shortages in key markets around the world, namely the US and Europe. This is supporting prices on the global market.\u201d<\/p>\n As reported earlier on Beef Central, some UK farmers and interest groups remain up in arms<\/a> about the perceived threat of Australian beef, wrongly saying it is universally produced with the aid of hormonal growth promotants, and managed under inferior animal welfare and environmental standards.<\/p>\n
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