August 25, 2010

UK farmers demand an end to low beef prices

Farming unions from across the UK have called on the beef supply chain to improve prices paid to farmers.

A joint statement from NFU Scotland, NFU, NFU Cymru and the Ulster Farmers' Union warned that the long-term sustainability of UK beef production was being threatened by continuing low prices, which were below the cost of production in many cases.

Earlier this month deadweight cattle prices slipped to their lowest level since August 2008, partly due to an unseasonal increase in slaughter numbers. The average R4L steer price fell to US$4.13/kg and has hovered close to that level since then.

The joint statement called on retailers to demonstrate their commitment to UK-produced beef and give producers a "fair share" of the retail price.

It also expressed fears that production costs could escalate on the back of rising feed and bedding costs this autumn.

"At current prices beef producers will be unable to afford to produce beef this winter and some are starting to seriously question their future in the industry," it said.

"We hear the right signals from the supply chain about the need to secure supply on a long-term basis but the short-term approach currently being taken illustrates that the market is failing to deliver," it stated.

Retail sales are up on-year but this has been driven by promotions, the statement said, adding that retailers need to look at ways to re-balance the carcass and ensure producers receive more market share.

"In order to install confidence and drive sustainability the retailers and processors have got to start backing up their claims of commitment to UK beef farmers. We have started to see some positive supply chain initiatives from some but we need to see these go further and backed up by greater commitment to UK produce," it added.