AIMS says lower retail prices are adding pressure on British farmers and processors already facing elevated input costs
Fresh meat and poultry prices fell again in September, intensifying concerns that British farmers and processors are not recovering rising production costs at the supermarket checkout.
The Association of Independent Meat Suppliers (AIMS) said its latest fresh meat and poultry inflation report found the average price across 30 lines fell by 0.74%, or 9p/kg, compared with August. AIMS said the same 0.74% decline was also recorded year on year.
The figures follow a softer trend in official inflation data, with the Office for National Statistics reporting a slight fall in meat prices in August.
Tony Goodger, head of communications at AIMS, said September continued that pattern, with all three red meat categories moving lower over the month.
Chicken was the only category to rise month on month, up 3.17%, or 15p/kg, but prices remained lower than a year earlier overall.
Chicken breast portions were down 5.54%, or 42p/kg, while thigh fillets fell by 11.39%, or ÂŁ1.03/kg. Across the category, chicken prices were 1.01% lower year on year, equivalent to a fall of 5p/kg.
Lamb remained the main exception to the wider annual decline, with prices up by 71p/kg, or 4.25%. AIMS said the continued strength in lamb prices prevented the overall 12-month fall across fresh meat and poultry from being even greater.
Goodger said the figures raised questions over whether higher farm and processing costs were being adequately reflected at retail level.
“I suggest that whilst British farmers and poultry processors have been battling the never ending rise in input costs their overall cost of production is not being adequately remunerated at the supermarket checkout.”
AIMS also pointed to planned expansion by Aldi as a potential source of further pressure within the poultry supply chain.
The retailer has announced plans to invest close to ÂŁ1bn over the coming year and has committed to fresh British Red Tractor-assured chicken. AIMS warned that stronger demand could add pressure if new production capacity is not approved quickly.
Goodger said this could create further supply and demand pressures “unless an expansion in production is quickly approved by local planners”.
The report also drew a comparison with fresh salmon prices.
Goodger said ONS figures showed fresh salmon fillets were 2.2% more expensive year on year in August, while British chicken fillets were 0.4% cheaper over the same period.
He suggested differences in market competition may have allowed salmon prices to move more closely in line with higher production costs.
Looking ahead, AIMS expects demand to strengthen as students return to university and children return to school, increasing foodservice requirements for British meat and poultry. Warmer weather could also extend the barbecue season into October, supporting demand for steak, mince and other grilling products.
Goodger said: “The coming month will be interesting with students back at university and children at school there will be an increased demand from foodservice buyers who are committed to British meat and poultry supply chains.”
The key question will be whether stronger demand helps improve returns across the supply chain as producers continue to face higher input costs.