Farmers, Processors Need Share of the Retail Beef

UK - More must be done to make sure that income generated by the consumer spending boom on fresh beef is shared evenly across the industry, according to the National Beef Association.
calendar icon 22 December 2008
clock icon 2 minute read

The association wants to see a greater proportion of the additional £4 million a week being earned by retailers on the back of a 35.8 per cent, year on year, rise in the shop price of mince and a 20 per cent lift in the value of steak and roasting joints, to be passed back to processors, and then to farmers too, so that these vital, but cash starved, sections of the supply chain are better able to cover their costs and stay in business

“Retailers have at last realised that demand for well labelled, home produced, beef is inelastic and consumers, who are clearly willing to pay much more for it, are still buying beef in almost the same volume as they were when it was seriously underpriced,” explained NBA director, Kim Haywood.

“However it is important that this extra revenue flows evenly across the industry so that supplies of the home produced cuts, which consumers have an obvious preference for, continue to come forward.”

The NBA has noted that a 50,000 tonne supply shortfall of domestically produced mince is anticipated over January and warns that the deficit will increase unless more beef farmers feel confident about the long term survival of their businesses.

“Retailers earn most money from beef sold under UK labels because consumers are more enthusiastic about it and that is where their loyalties lie,” said Ms Haywood.

“In contrast beef imports, including those from the Republic of Ireland, are not as popular and there is obvious resistance to prices rises – which means retailers are denying themselves a chance to make even more money if they reduce the proportion of British beef available to them.”

“This important supply problem, and the accompanying opportunity to earn additional income, can be resolved if British farmers are given the confidence to stay in business by being offered substantially more for their slaughter cattle.”

“And, now that more retail beef is no longer being sold at huge unnecessary discounts, this can be most easily done by making sure that some of the extra £200 million expected to be generated across the next 12 months of consumer spending is passed along the domestic supply chain.”

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