THE FARMERS
There are 40,000 dairy farmers and 70,000 beef farmers in Britain. Beef farmers with prime animals younger than 30 months are suffering most. If they sell now they could lose up to £150 an animal, compared with what they would have been paid before the announcement on March 20 of the possible link between BSE and CJD in human beings. If they hold back, there is no certainty that prices will improve. Farmers with cattle older than 30 months will be reasonably compensated when these animals are taken off their hands and destroyed. Pay ments average between £480 and £800 per animal, depending on weight and type. The cost will run to about £630 million in the first year, funded partly by the European Union. Farmers are frustrated by the slow pace at which the slaughter is proceeding. This is mainly because of the limited number of incinerators and rendering plants in which to dispose of the carcasses. No one knows how many animals older than 30 months are still on farms awaiting slaughter. Estimates range from 150,000 to more than 300,000.
ABATTOIRS
Many of the initial lay-offs of staff were in abattoirs as cattle sales slumped. But abattoirs and renderers have now been given the work of culling and destroying older animals and have received a total of £228 million in government aid. Some abattoirs are still in financial trouble, however, because supermarkets will not accept beef from plants that are also involved in culling older cattle. Several of the biggest and most efficient plants have lost their export trade and need to be able to increase supermarket business and culling to be viable.
MARKETS
There are about 200 livestock markets in Britain. Auctioneers earn a commission that is fixed as a percentage of the price of every head of cattle sold. In the second week of May, the number of prime steers and heifers traded at markets was 13,497, compared with 22,247 at the same time last year. The average price was £555, against £665 a year ago. Auctioneers fear that they will lose under the scheme for culling cattle aged more than 30 months because farmers are compensated at a better rate if they send those animals direct to an abattoir.
HAULIERS
The Road Haulage Association says 5,000 lorries and 8,000 people are normally involved in transporting cattle and beef. Graham Houghton, its livestock controller, said: "The export trade has completely gone and the transport of cattle from farms to markets is 40 per cent down. Up to 70 firms have gone out of business or stopped trading." Firms are estimated to have lost £90 million of turnover. The glut of empty livestock lorries and refrigerated beef vans looking for other cargoes has forced down the rates for all haulage work by as much as 25 per cent.
EXPORTERS
Beck Foods, of Boston, Lincolnshire, is typical of the many meat-processing and packing firms affected by the BSE crisis. It did 30 per cent of its business abroad. Turnover is now down from £110 million to £75 million and it has had to lay off 200 of its 600 staff. Morris Bond, chairman and managing director, runs his own abattoir and will qualify for a share of the £110 million aid for slaughterhouses. First City Trading, in London, whose sole business is exporting beef, is not eligible for any aid. It is left with £2.75 million of unsold stocks.
RETAILERS
Beef sales fell by more than 50 per cent after March 20. The Meat and Livestock Commission says sales are now back to 94 per cent of the pre-March level. Asda puts its sales at 90 per cent of normal and last week announced it was banishing foreign beef from its shelves. But other supermarket chains, as well as the National Federation of Meat and Food Traders, representing butchers, says sales are still 20 per cent down. Demand for other meats has risen, pushing up prices by 17 per cent for lamb, 10 per cent for pork and 8 per cent for poultry.
On March 28 the Government announced that cattle head meat was to be added to the list of bovine carcass parts no longer deemed safe for human consumption. Scientists had advised that brain tissue, known to be an area of BSE infection, might contaminate the rest of the head.
"Overnight a factory in which I had invested £500,000 only two years ago, taking out bank loans and a mortgage on my house, was forced out of business," he said. "I have had to get rid of the 22 people who worked there and am facing redundancy claims of up to £60,000. I owe abattoirs who supplied me with cattle heads a further £50,000 and have been left with £20,000 of unsold stock. I have put my house up for sale to try and pay off my debts." Mr Cattermole's factory processed 300,000 cattle heads a year and was one of the biggest members of the Association of Cattle Head De-Boners, representing an industry which until eight weeks ago had a turnover of £20 million a year and a workforce of 300.
Mr Cattermole, 32, has two daughters, Danielle, 10, and Lucy, 12. His wife, Joanne-Marie, does not go out to work so the factory was the family's only source of income.
Before the ban on head meat, the Cattermole meat cutting plant on an industrial estate had an annual turnover of £1.7 million and made a net profit of £200,000. "Trying to find other work for the plant will be difficult. Operating costs are £4,000 a week so we would have to be very confident of any new business we started."
Graham Reed, the association's chairman, said: "An entire specialist industry has been shut down without warning. It is blatantly unfair that the Government has offered no compensation. It is near impossible to find other work for our plants because of over-capacity in the abattoir and meat cutting industry."
In addition to the financial disaster many farmers face, it is estimated that up to 10,000 ancillary workers have been laid off, put on short-time or made redundant since the global export ban was imposed on March 27. Despite earmarking nearly £1 billion to support the industry, introducing new safeguards to protect the public and embarking on the destruction of about one million older cattle, the Government is no nearer persuading the European Union to lift its ban.
Even if Douglas Hogg, the Agriculture Minister, had succeeded this week in persuading other EU ministers to end the ban on beef by-products such as tallow, gelatine and semen, exporters would have gained little financial relief. At a generous estimate, these items earned no more than £34 million last year.
That compares with the beef exports worth £520 million annually that remain blocked, and the £70 million earned by the export of 450,000 calves to the Continent last year for the veal trade. Sheep exports, worth £40 million, are also at a standstill because the trade is not viable without cattle to ship with them.
As well as failing to persuade the EU that British beef can safely be imported and eaten, the Government has had little support at home for the rescue strategy it is struggling to put in place.
Even before other EU ministers had rejected as inadequate Mr Hogg's plan to cull up to 80,000 cattle, mainly dairy, considered to be at high risk of developing BSE, British farmers and vets had denounced the scheme as irrelevant and unjustified. The cull would have been in addition to the slaughter and incineration of cattle older than 30 months, already under way, and is designed to ensure that only those animals least likely to be incubating BSE enter the food chain.
Meanwhile, exporters, who were left with unsold beef stocks worth £18 million when the ban began, are aggrieved that they have had no help from the Government. The International Meat Trade Association is taking the Ministry of Agriculture to court for alleged unlawful discrimination between suppliers.
A GROUP of abattoir owners and cattle farmers is today starting legal action that could wreck the Government's strategy for restoring consumer confidence in beef. Lawyers for the Quality Meat and Livestock Alliance will seek leave in the High Court to apply for a judicial review of the ban on the sale for food of cattle over 30 months old. They will argue that the ban is illegal. "We are seeking an expedited proceeding because of the urgency of the case," Richard North, a food safety consultant who is advising the group, said.
If the legal challenge succeeds, it will be devastating. Retailers have been rebuilding sales of beef by guaranteeing that it now comes only from animals under 30 months old. Members of the alliance are furious because the cull of cattle over 30 months old includes not only barren dairy cows at the end of their useful working lives but tens of thousands of prime beef cattle, even though only 15 per cent of beef herds have ever had a case of BSE.
ONE thousand jobs came under threat yesterday at Cricket St Thomas Dairies in Somerset after the appointment of an bankruptcy administrator
Cricket St Thomas failed to achieve expected efficiency gains and was granted the appointment of administrators at the High Court on Sunday. Its difficulties were compounded over the last two months as milk sales were depressed after the bovine spongiform encephalopathy (BSE)scare. The collapse of the milk export market led to a surplus that depressed prices in spite of the lack of scientific evidence linking milk to BSE.
The Somerset company has an annual turnover of £90 million and employs 400 people at its dairy and 600 at its 16 depots. It supplies milk and cream products to supermarkets, retailers and on a doorstep delivery service.
Arthur Andersen said the decision to put the dairy into administration meant it would continue to trade as a going concern and provided a "realistic prospect of finding a solution to the current difficulties". The administrator is currently conducting a detailed appraisal of trading and financial prospects.
Dairy Crest has been considering a stock flotation for several months and said in early December last year that it was still prepared for a full listing on the London Stock Exchange. The company is expected to be valued at £200 million.