SCOTLAND'S beef producers are angry. Prices for finished cattle have fallen by as much as 15p per kilo deadweight to little more than 195p.

Many farmers who bought store cattle in the spring, admittedly at seemingly high values, now face the prospect of barely recouping their initial investment when these animals are sent for slaughter.

If producer returns have slipped sharply the same cannot be said for prices in supermarkets where there has been no appreciable change. The blame for the price collapse is being placed by the industry on the supermarkets, which are increasingly using more beef from South America.

Figures from Customs & Excise reveal that in the first quarter of 2005 imports of Brazilian beef rose by 29-per cent, while J Sainsbury has conceded that it has almost doubled the amount of beef it sells from South America.

Farmers tend to be optimists by nature, but if this price dip continues then the consequences could be severe, according to John Kinnaird, president of NFU Scotland.

He said: "Consumers in Scotland and beyond want to buy safe, high-quality Scottish beef. They do not want imports which are all too often produced to lower standards.

"It would be ironic if, as a result of lower prices, Scottish beef production reduced, and we had to rely more heavily on imports that may well be causing environmental damage, either by greenhouse gas emissions associated with increased food miles or by the destruction of the Amazon rain forest as production of beef in South America increases."

Jim Stewart, chairman of the north-east regional board of NFUS, is a beef producer who farms near Rothienorman. He said: "The talk has been of little else but low beef prices. Given the prices that finishers paid in the spring for store cattle they are going to need 220p to 230p per kilo, but it looks as though that will not materialise.

"We were told we should not use the single farm payment to subsidise beef production, but there now seems little alternative. If prices do not improve I can see a reduction in the suckler herd, and a lot of people are thinking of doing that. Why should they continue producing when there is no money in it?"

Isla Roebuck, president of the Scottish Association of Meat Wholesalers, understands the problems of farmers but he has to operate his business in the commercial world. He said:

There are a lot of factors involved in this price fall. But the reality is this nightmare has come at a time when there is too much beef on the market.

Sadly, it is all about supply and demand. In the trade we can only charge what our customers are willing to pay."

The trouble is that many of those customers, mostly supermarkets, have locked themselves into contracts to purchase imported beef.

These deals are usually made of a three-monthly basis.

Another factor has been the slowdown in consumer spending. The less expensive cuts of beef, including mince, are selling relatively well but steaks and roasting joints have been slower to move.

The trade will not say so publicly, but there is feeling the industry, largely through the National Beef Association, may have shot itself in the foot by stating that price of cattle had to be 250p per kilo.

Supermarket buyers may then have decided if prices were going rise to 250p they would better serve the interests of their shareholders by sourcing cheaper imported beef.

Beef prices have slipped throughout much of the EU in the last two weeks, but still remain above UK values. Heifers in France are quoted at euros-3.41 (232p) per kilo - 8.3-per cent higher than 12 months ago - while the UK trade, according the Meat & Livestock Commission, is almost 5-per cent lower than last July.