Despite surplus trend British buyers may not see more favourable prices Brussels warns over market saturation Surpluses will again become a permanent feature of the EU beef market unless official measures are introduced to cut output. This is the blunt message from Brussels in its latest assessment of post-BSE supply and consumption trends. "It is difficult to imagine consumption will recover to its former level, even in the long term," said EU agriculture commissioner Franz Fischler The warning of market saturation is not necessarily a promise of more favourable prices for British buyers in the short to medium term, as the FMD crisis and cattle breeding herd trends visible earlier could squeeze supply here, especially in Scotland. It is even possible the UK market will tighten further than forecast, as any output restrictions imposed by Brussels to deal with the overall EU surplus would have to be applied here despite more resilient demand in the UK. Fischler's pessimistic commentary was intended to disillusion producers and traders tempted into complacency by recent signs of market recovery. The BSE scare on the Continent late last year caused catastrophic falls in consumption in several member states, notably Germany. Latest available figures show much less dramatic declines, averaging just 10% across the EU, and prices have stabilised or strengthened slightly. Steadier trade has been achieved partly by the Commission taking nearly half a million tonnes off the market, mostly into intervention. But large numbers of cows are still held back on farms and major export markets are shut, threatening a permanent imbalance to EU beef. Conspiracy theorists have long believed MAFF and Brussels might use foot and mouth disease as a convenient method of shrinking this country's expensively subsidised herds and flocks, and Fischler's warning seems certain to be interpreted as confirming their suspicions. Militant lobbying organisation the National Beef Association claimed on Tuesday "the government may be looking at thinning down suckler [cow] numbers even though the UK is only 70% self sufficient in beef". The NBA believes MAFF strategists want to buy up and freeze' suckler quota left unused by the FMD cull, effectively reducing the national herd qualifying for subsidy. In theory this should not cause problems for retailers or processors, as supplies will be available from the continent and Ireland, though UK slaughterers would be hit. {{M/E MEAT }}

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