Below-cost production is real lamb threat

I read with interest your editor's comments in Meat Trades Journal (16 April 2010) where you warn of the dangers of a boom and bust economy within the lamb sector.

I am adamant that the present prices are a step in the right direction for what is a high-value product, delivering excellent value-for-money to the consumer. However, we now need to see these prices sustained in order give confidence to producers to invest in future production.

I take issue with your "smash and grab" analogy the NFU has consistently highlighted the danger of volatility and we have long argued the need for sustainability within the sheep sector. There is no doubt that export conditions are the major factor in the present market price, but let's be absolutely clear; for years, sheep farmers have suffered from unprofitability, producing lamb at below costs of production, which has led to the decline in the national flock and a lack of investment in basic infrastructures

I would point out that the export market has not changed significantly in terms of volume exported; rather, it is the domestic supply base that has eroded due to years of unprofitability. Eblex has done a great job in developing export markets and increasing its promotional spend on English lamb within the EU and we would expect this investment to lead to strong and robust links that are able to withstand any future currency changes.

Volatility and operating at below the cost of production threaten our domestic production base. But given the right signals and incentives from a functioning, open and transparent supply chain, we as producers are more likely to invest in, and meet demand for, British lamb.