Farming: Red meat warning as Ukraine conflict hits trade patterns

Despite not having a direct impact on market prices for livestock at present, the Russian invasion of Ukraine is already affecting trading patterns and product movement world-wide.
Experts say it is difficult to forecast demand trends for red meatExperts say it is difficult to forecast demand trends for red meat
Experts say it is difficult to forecast demand trends for red meat

The “watch this space” warning came after new HMRC figures indicated that in the weeks prior to the conflict, the international red meat trade was making slow but steady recovery from the Brexit and Covid impacts suffered since January of 2021, due to the disruption and delays at channel ports.

But as Russia’s invasion of Ukraine evolved and input costs for farmers and processors increase, the recovery process could be hindered again over the coming weeks, the trade was warned this week.

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While the HMRC figures showed that both exports and imports of beef were up almost 30 per cent on the year for January 2022, this had been mainly due to the shipping problems seen in the first weeks following Brexit in January 2021.

More pig meat was also shipped both in and out of the UK too, with a 64 per cent rise in exports and an 88 per cent hike in imports, despite the sector’s troubles and the promise of better support for domestic trade from supermarkets.

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“The demand for red meat on the UK market has remained firm following changes in consumption habits during the Covid-19 pandemic,” said Glesni Phillips, a data analyst with the Welsh meat promotion body HCC.

“Current export volumes remain significantly lower than pre-Brexit levels and the five-year average for January, for the sheep sector in particular, although the overall value of exports has held up well.”

She also said that the market was beginning to follow seasonal trends again – but remained unclear when the trade would return to the normality of 2019.

Commenting on the effects of the war in Ukraine, Phillips said that both nations were significant grain producers, and the two are major exporters of raw materials for the agricultural sector, including fuel and fertiliser.

“For some months, it’s been clear that strong lamb and beef prices – driven by high retail sales and tight supply – have been partially offset for many farmers by high input costs,” she added.

Rising feed costs, alongside price rises in fertiliser, fuel and energy, are certain to have consequences for many businesses in all parts of the food supply chain.

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And with inflation continuing to rise, she said it was difficult to forecast demand trends for red meat as consumers suffered a squeeze on household expenditure.

Meanwhile, Irish sheep farmers were warning that potential shortages in fertiliser and feed could have serious implications for sheep farmers if the sector was not recognised and supported.

The Irish Farmers Association said that sheep farming was an extremely low-income sector – adding that the current levels of input cost increases could not be absorbed by businesses.

“We must have immediate direct support for sheep farmers to offset the costs of fertiliser, feed and fuel. Availability and cost issues are causing huge concern for farmers. This is further compounded by increased contractor costs for silage making that will hit sheep farmers hard”, said the Association.

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