The United Kingdom provides growth opportunities for US consumer-oriented products including specialty foods, wine, sauces, fruits and nuts, said a report from the USDA’s Foreign Agricultural Service.
The key problem for the US is that UK consumers are willing to try foods from other countries, but they expect quality products at a competitive price, while shipping costs, trade barriers and duties make it hard to compete on price.
However, there also are opportunities for US meat, especially chicken, the USDA said.
“The United Kingdom (UK) has a population of 67.1 million,” the FAS said. “It is a leading trading power and financial center and the third-largest economy in Europe.
“Agriculture is intensive, highly mechanized and efficient by European standards, but accounts for less than 1% of the Gross Domestic Product,” the USDA said. ‘While UK agriculture produces about 58% of the country’s food needs with less than 2% of the labor force, the UK is heavily reliant on imports to meet the varied demands of the UK consumer, who expects year-round availability of all food products.
“The UK is very receptive to goods and services from the United States,” the FAS said. “Demand for US consumer-oriented food products continues to differentiate the UK from many of its European neighbors.”
CHALLENGES REMAIN
The retail food sector is saturated, highly consolidated and competitive, the FAS said. The top four retailers together account for 65% of the market, but discounted stores and products are overtaking some stores and brands.
Independent stores face strong competition from brick-and-mortar grocery stores and online retailers, the USDA said. Online sales could increase to become the second fastest-growing channel by next year, as rapid grocery deliveries become increasingly popular.
UK supermarket chains demand significant volume, and their concentration can make initial market access difficult. Trial listings must give results in a short period of time, or products will be removed.
The UK has well-established brands, so brand-building costs are substantial, and there’s that time-crunch thing.
BUT NOT INSURMOUNTABLE
From January to October 2023, the UK imported more than $3.3 billion in agriculture and related products from the US, a 1.4% increase over the same period in 2022, the FAS said. Based on USDA data from the Global Agricultural Trade System, US exports of agriculture and related products to the UK were the highest since records began in 1970.
In 2022, UK imports of US agricultural related products (forestry, biodiesel and seafood) exceeded $1.4 billion (according to TDM data) surpassing consumer-oriented food and beverage products as the most important UK market sector for US agriculture.
In the first 10 months of 2023, US consumer-oriented imports were marginally higher, exceeding $1 billion, the USDA said. Demand for US consumer-oriented food products continued to differentiate the UK from many of its European neighbors.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $173.00 per cwt to $176.63, compared with last week’s range of $172.00 to $175.59 per cwt. FOB dressed steers, and heifers went for $270.02 per cwt to $279.69, compared with $269.19 to $274.88.
The USDA choice cutout Thursday was up $2.82 per cwt at $285.89 while select was up $3.00 at $269.94. The choice/select spread narrowed to $15.95 from $16.13 with 85 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.25 to $1.35 a bushel over the Mar corn contract, which settled at $4.57 3/4 a bushel, down $0.01 3/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $227.75 per cwt, down $0.66. This compares with Thursday’s Jan contract settlement of $226.27, up $1.65.