THE subsidy system was this week blamed for causing peaks and troughs in beef supplies.

And Murray Hardy, livestock procurement manager for Scotbeef, said they must be ironed out.

Between September and December there was traditionally low supply and high demand in the run up to Christmas, resulting in firm prices, but in January to March, when no-one wanted to buy it, there were more beef cattle coming on the market because of the subsidy system.

"We have got to level out the peaks and troughs," Mr Hardy told the North of England Beef Shorthorn Club meeting at Scotch Corner.

Scotbeef is the sole supplier of pre-packed joints to Marks & Spencer. They specialise in top quality Aberdeen Angus, Shorthorn, and Highland beef and Salt Marsh Lamb.

The company had looked at forward contracting and, in a bid to get a steadier supply of Aberdeen Angus, had paid for some to be put out on grass until they were marketed in June/July.

An all-year-round supply of Aberdeen Angus had been achieved and the ultimate aim was to achieve a steady supply from the other breeds - even if, to begin with, it was only for set months.

Mr Hardy said Scotbeef was only interested in selling good quality eating beef and, by using traditional breeds such as the Shorthorn, they were certain they could do that.

"By getting numbers and quality we will be able to develop a firm market and a good market," he said.

Scotbeef is paying a 5p/kg premium for Shorthorn in England and Scotland. Since January they have handled 400 Shorthorn - compared with 400 Aberdeen Angus a week - and are looking for more supplies, including those from the North of England.

Mr Hardy said Scotbeef, a family owned company, was growing all the time. In 1991 its turnover was £30m. Last year, despite foot-and-mouth, the turnover was almost £80m.

The pre-packed joints are produced solely for Marks & Spencer and Mr Hardy gave a surprising statistic: "For every one animal we sell we need 630 customers to buy it.

"The pack sizes are generally for two people and, with an average weekly kill of 1,400 beef animals, we need 1.6m customers. This is encouraging, because Marks & Spencer has 10m consumers going to their stores each week."

Scotbeef has its own Beef Track unique assurance scheme which has proved highly successful.

Apart from Marks & Spencer, the company also supplies the Co-op and Sainsburys. Those three account for 85pc of its turnover, with Marks and Spencer alone accouning for 50pc of total turnover. Other customers include Northern foods; Tulip; R F Brooks; and McKey, who make burgers for McDonalds.

Scotbeef has one of the most modern plants in Europe and has a total workforce of 500, many of whom have been with them for 15 to 20 years.

Mr Hardy believed producers had to keep up with consumers changing trends. "People do not eat to live now, they live to eat," he said, pointing out that many did not want to spend more than 20 minutes preparing a meal and also ate out far more regularly.

In 1968, for every £100 the housewife spent, £26 of it was on food for the home. In 1998 that figure had dropped to only £17.

However beef was the only meat for which demand was increasing - pork and lamb were both hard to sell.

Mr Hardy believed there was a great opportunity for the Shorthorn breed and feedback from consumers who had bought its beef was very positive.

Scotbeef was keen to hear from more Shorthorn producers.

There was no membership fee. "Our chairman is a great believer in putting something back in and not taking it out," said Mr Hardy. "You do not have to pay to be a member; you pay by bringing enthusiasm and willingness to do what the consumer wants."

James Playfair-Hannay, national president of the society, attended the meeting.

Addressing members he appealed to them to put forward ideas which could benefit the breed. "The society is not a big one, we do not register a lot of cattle, but it has to be said a lot of us feel we do not, in the UK, get the justice our breed deserves in comparison with the rest of the world.