New warnings over UK beef supply

The National Farmers Union (NFU) has this morning called on the whole supply chain to back British beef farmers, as prices continue to fall below the cost of production.

It issued the plea as it claimed that farmers received on average just 48% of the final retail price for their beef. Separately, the National Beef Association (NBA) also warned that further regulatory costs would “inflict further, probably fatal, damage” on UK beef production.

Meanwhile, Eblex, the levy body, revealed that  the national beef and dairy cow numbers have stabilised for the first time in more than a decade.

Alistair Mackintosh, the NFU livestock board chairman, acknowledged that consumers were facing the punch, but warned “less and less will retailers be able to fill their gap with foreign beef”.

Mackintosh said: “Beef prices at their current level are unsustainable – prices are nowhere near the cost of production and farmers are currently receiving on average just 48% of the final retail price for their beef.

“We are calling on processors and retailers to provide producers with fair and sustainable prices in order to ensure the viability of the industry. We have a product that is second to none in the world and if abattoirs and retailers want to guarantee their supply of British beef for their customers into the future, they must act now.”     

He added that production in Ireland looks set to fall – and that prices from Brazil were on a par with Europe.

Kim Haywood, director of the NBA, added: “Retailers and processors have developed the habit of passing cost increases back to the farmer. But this cannot continue because producers, who are faced with simultaneous, mind-numbing leaps in feed, fuel, and fertiliser costs, are close to breaking point and cannot take on more expense.

“A re-alignment of shared food sector cost is needed. Processors should already be aware that livestock farmers will refuse to allow new costs to be passed on to them, but they should also be aware that beef finishers are looking for a re-appraisal of post-slaughter off-takes as well.”

Separately, the 2010 June Agricultural Census, revealed by Eblex, showed a year-on-year decline of less than 0.5% in the UK dairy herd alongside an increase of nearly 3% in beef breeding cow numbers. It said that, on this basis, the overall national cattle breeding herd is expected to stabilise at just over 1.9 million head in 2011 – or some 80% of its level at the start of the century.

Eblex senior economic analyst Mark Topliff said: “Eblex, however, forecasts that prime cattle slaughterings will continue falling over the coming year. This is mainly due to reduced pure-bred dairy bull calf registrations as a result of declining intensive rearing demand in the face of the high cereal and bedding prices seen this winter and expected to continue through 2011.

“Beef production over the past year was noticeably higher than 2009, as finishers took stock to generally higher slaughter weights in an attempt to offset relatively high purchased store cattle costs. With high cereal-based feed costs providing a major disincentive to this practice, average carcase weights are forecast to fall back again. Combined with lower slaughterings, this is likely to lead prime beef production to fall back again, particularly in the second half.”

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