October 23, 2008

The beef supply chain has to work together to boost confidence in the sector so that long-term beef supply would not be adversely affected by recent falls in beef price, according to Alistair Mackintosh, livestock board chairman of the National Farmers Union.

Mackintosh said he had expected prices to remain firm due to indications of global beef shortage, but a recent seasonal oversupply of cattle have pressurised prices.

As a result, producers would have to be cautious of how and when they market their stock as continued short-term oversupply would further pressurise current prices, said Mackintosh.

Processors must provide the industry with the right signals to invest with confidence in red meat production, he said.

"If they are truly concerned about the supply business they need to recognise producers need these clear long term signals and that negative prices can have a major impact on long term supply," said Mackintosh.

The price may have improved from the same period last year, but processors also must realise that beef producers have not seen extra returns as the increase has been eroded by rising input costs, and that the extra costs need to be covered, according to Mackintosh.