We are currently in a period of unprecedented global disruption, which is having a drastic impact on the food supply chain, both in pricing and support. Many primary proteins and secondary components that make up the supply chain are being delayed. The global meat markets are struggling having price inflations and market disruptions on an on-going basis. Because of this it is vital to address the key issues of Labour and Transport which are widely reported of also being in crisis.
Within the UK and European meat sector labour markets are in a midst of their own problems. With the pressures of the COVID-19 Pandemic and on-going Brexit changes the industry continues to struggle. The meat sector is heavily reliant on workers from Eastern Europe, the two pressures deterred potential employees. The pandemic has resulted in mass furloughs which has lead to a delay in work.
There is an estimated shortfall of over 70,000 Heavy Goods Vehicle drivers [HGV] across the UK and EU. This has had an enormous impact on the supply chain not only for the Foodservice industry but also in retail. The shortfalls are resulting in longer lead times for deliveries and in some instances not able to deliver. Alongside this is the school ‘Summer Holidays’ in which a considerable portion of the transport workforce take their annual leave. With the demand remaining high across the summer the strain on the transport sector will continue to tighten.
Across the EU Avian Influenza continues to be an issue, particularly in Poland with chicken, turkey and duck farms affected. Turkey products are already spiking and expecting to do so into the Winter period. Another huge and sometimes forgotten impact on the sector is animal welfare, the Netherlands are having a 1/3 fewer chickens housed due to their introduction to improved welfare standards; which has caused a decline in exports from the Dutch to the UK. As all markets are experiencing the pandemic it has fuelled a number of ‘staycations’ and the UK has seen a huge surge in BBQ products which in-turn has increased demand.
The situation with Beef across the UK and EU remains challenging. Cattle numbers are very low and prices stay higher than usual after a very brief decline in the last few weeks. In fact the price of Beef remains at a 7-year high as we move into September. With foodservices gradually opening since May combined with poor weather conditions the strains on beef products temporarily subsided. However on the flip side with the Hospitality sector now returning to somewhat normality and the improved weather conditions demand has drastically increased for Beef products. In addition the low cattle population and continue pressures on the farming industry has only made the price for beef increase month on month.
Usually in extreme cases where quantities of stock cannot be accessed the UK would import volumes of Beef from South American or the EU to fill the gaps. Unfortunately the two continents in question struggle to meet there own demands and therefore cannot share their stock. The EU struggling with Labour issues, South America struggling for cattle numbers or Argentina which have their self-imposed export bans.
Similarly to Poultry products within the UK the raise in staycations and BBQ’s has only made the increase on beef products continue to sky-rocket. On a positive note as the year progresses it seems as though cattle and meat prices will being to settle, albeit slightly higher than average.
Looking ahead it looks as though the demand for fresh meat products across the sector will inevitably rise. The shadow the pandemic has cast over the globe slowly begins to rise and with it so to does usual working practices. With it currently being the biggest constraint on the workforce and markets. In time we will see how these markets recuperate alongside a stable and consistent workforce.