April 2, 2008

Cheap meat could cause crisis across UK's meat sector
 

The days of selling protein too cheaply are over and destructive price competition and deep-cut meat promotions are not sustainable, the UK's Meat and Livestock Commission chairman Peter Barr said last week.

Barr was speaking at the last-ever MLC Commission board meeting. From 1 April 2008 the new statutory levy board takes over, the Agriculture and Horticulture Development Board (AHDB) which would regulate not only the meat and livestock sector but also horticulture; milk and potatoes in Great Britain and cereals and oilseeds in the UK.

Red meat supplies are tightening across Europe and unless retailers stop keeping consumer prices down artificially, they will be caught out when the meat supply chain can no longer deliver the volumes required, Barr said.

However, he said he was happy to see farmgate prices going up, which was much needed. Still, current prices remain a long way from realizing the true cost of production.

He noted that the red meat processing industry has been only sporadically successful in passing the farmgate price rises on to their own retail customers.

Processors are being squeezed and there will be unnecessary business failures as a result, he warned.

Raw material shortage in the EU livestock farming sector would continue to grow due to changes in the Agricultural Policy (CAP) and poor profitability. The shortfall would only worsen as the world population expands, he remarked.

Ultimately consumers will have to pay more for meat and increased market returns will need to be shared equitably through the supply chain to ensure processors and producers can survive and consumers can continue to buy meat, Barr said.