NFU warns beef supply chain as prices fall

The NFU is warning the beef supply chain that the falling beef price is knocking producer confidence and undermining the long term sustainability of UK beef production.

It comes after figures published by Eblex show that the farm retail price spread has hit a high of 53.2 per cent which is the highest figure since Jan 2008.

This figure illustrates that while the average retail price of beef is at similar levels to one year ago, the average farm price has dropped around 20p per kilo which has led to an actual price spread of 300p.

NFU livestock board chairman Alistair Mackintosh is warning the supply chain that the situation is not sustainable and producers need to get a fair share of the retail price in order to continue in production.

He said:"Figures show that demand for beef has remained relatively robust over the previous year even though it’s being driven by promotions. I believe that there is scope to re-balance returns from the carcass and more return could then be made from mince, making the higher value cuts more price-competitive.

"The supply chain must recognise the imbalance this present situation could lead to if it is not resolved. If processers and retailers are serious about protecting the future viability of the UK beef industry then they need to address the present situation.

"Price is determined by supply and demand and if the present situation is to be avoided in the future then producersmust understand the market conditions and the supply chain must ensure a fairer return for the producer.

"Farmers need to understand the market conditions; we have seen supply increase slightly due to a combination of factors such as increased levels of dairy beef, an unfavourable spring, higher carcase weights and seasonality.

Farmers need to recognise the effectthat the oversupply situation has on the beef price and tailor their marketing strategy in order to maximise their returns."