Abattoir sector structure dispute misses the problem on the farms
Major retailers bemused by the conflicting allegations about their role in meat industry restructuring might ask why they are accused of causing cost and price distortions when an equally powerful influence at the other end of the supply chain goes almost unnoticed.
Much of the current debate over the future of small and medium sized abattoirs focuses on the retail meat market share of the multiples and the supposedly underestimated demand from other outlets including further processors and caterers.
Inflexible supply of livestock attracts less attention.
New data and analysis from the Scottish Executive, MAFF and MLC economists reveal surprising fragmentation persists in cattle and sheep production. These sectors show little sign of the consolidation visible in the pig industry since the 1998 price crash.
For instance, more than half the beef suckler cows in England are on holdings with fewer than 50 head of cattle. The average English suckler herd increased from about 23 cows in mid 1995 to 27 in June 1999 but these numbers are tiny by the standards of major beef industries internationally.
Scotland's more sophisticated beef sector has an average suckler herd of more than 50 cows yet this too is extremely small against the production units typical in North America, most of South America and Australasia.
In the dairy sector, likely to regain significance as a source of raw material for beef processors following the end of the subsidised calf cull (and later, perhaps, an easing of the Over Thirty Month Scheme rules to allow cows back into the manufacturing meat market) the numbers look a little more respectable by world standards, but the averages are only about 78 cows in England and 87 in Scotland.
The sheep sector picture is similar, with an average breeding ewe flock of only 221 head in England and 281 in Scotland.
Welsh suckler and dairy herds are even smaller than England's although breeding ewe flocks are predictably much bigger.
The significance of these numbers to major retailers and their main suppliers of meat is partly as a justification for the continued dispersal of kill capacity with its associated diseconomies and disputable overcapacity.
But there is also the problem of the profusion of pick up points allowing opponents of direct deadweight selling to argue for retention of live auctions.
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