Beef producers hit with £68m drop in cattle value

Industry figures believe the beef supply chain is being destroyed by the actions of processors and retailers.
Industry figures believe the beef supply chain is being destroyed by the actions of processors and retailers.

Struggling beef producers have been hit with a £68 million reduction in cattle value over the last 12-weeks in comparison to the same period in 2018.

This equates to the value of 70,000 store cattle within that period.

And while last year was not a record for the beef industry, prices were stronger than 2019, and competition for cattle was vigorous.

The National Beef Association (NBA) said the figures show that the UK beef industry's survival is 'under threat'.



One member of the group, speaking this week of his own experience of the trade, stated that his commercial cattle are back over £160 per head, and his Angus cattle down over £230 per head, week-on-week compared to last year.

“There are obviously fortunes to be made in the beef industry, as has been seen by recent articles on the assets of some of Ireland's wealthiest individuals, but some of that profit needs to go to the beef producer,” said Chris Mallon, chief executive of the NBA.



“There are many calls for the industry to be more efficient, but unless we can feed cattle on fresh air, there is no way profits can be made at the moment.

“How can the industry continue to restock with such drastic losses?”

Farmers could 'walk away from the industry'

Mr Mallon questioned how the sector can continue to produce beef at the level of throughput currently seen, if there is not an immediate rise in finished cattle prices.

“Potentially by the Autumn we will see producers walk away from the beef industry, and there will be drastic falls in production and a serious impact on store cattle values.

“Do processors want a supply of UK beef in the future, or are they betting on processing more imported beef and putting that into the mix?” he asked.

Industry figures believe the beef supply chain is being destroyed by the actions of processors and retailers.



Lack of competition between beef processors prevents any difference between bid prices, and a restriction in options for finishers.

Retailers have been urged to support UK produced beef and to ensure a fair price is paid for it by their processors.

Mr Mallon added: “How embarrassing will it be for those retailers who have a local beef policy, if they allow the supply of produce to disappear and they have to change to imported products?

“We really are at the point of seeing the industry suffering long term terminal damage.”

'Co-mingling' of beef

The NBA also warned that supermarkets need to stop the ‘co-mingling’ of beef.

Producers fear that mixing beef of different origins confuses customers and makes it more difficult to establish higher prices for UK product.

Mr Mallon said it is a 'deliberate attempt' by retailers to make money from cheaper imported beef and accept less for more expensive home-produced beef by mixing them up.

“Products of mixed origin should not be sold together, it confuses consumers,” he said.

While at one point over 70% of beef was sold under promotions by retailers, now it is less than 45%.

The NBA said it is 'crucial' that this changes quickly, and retailers show commitment to British beef producers.

Earlier this week the group highlighted how Producer Groups are 'essential' in addressing the dominance and lack of competition of processors and retailers.