United Kingdom-Farmgate prices.

UNITED KINGDOM-FARMGATE PRICES TO FARMERS.

Latest figures from EBLEX show beef producers received almost half the beef retail price last year, the highest proportion since 1995.

But with costs rising, the results show producers still struggling to survive.

The average beef farmgate price of 259.60 p/kg was 26% up on 2007 while the average 2008 retail carcass price at 520 p/kg only increased by 15% on 2007.

It was a similar picture for lamb, with the percentage of retail price going to producers standing at 47% and the average farmgate price of 296..8p/kg representing a 26% increase on 2007 prices.

The average 2008 retail carcase price of 628.8p/kg was only 9 percent up on 2007.

EBLEX chief executive Richard Lowe said the figures clearly showed margins had tightened in the processing sector.

"Farmers will undoubtedly welcome the news they received a larger share of last year’s retail price, but the ongoing impact of increased costs means they are still struggling to achieve real profitability," he said.

"Meanwhile processors are now clearly battling with the challenges of the exchange rate, tightening domestic supplies and changing consumer consumption patterns as shoppers switch to cheaper cuts such as mince and stewing steak.

"The months ahead will clearly be testing times for the UK beef and lamb supply chain - particularly as the industry waits to see the wider impact of the recession work its way through the system."

The figures also show shoppers spent £634 million on fresh and frozen lamb in 2008, and £1717 million on beef.

Retail volume sales were down slightly on 2007, with beef dropping slightly by 2.3% to 300,986 tonnes last year. Lamb sales also dipped by 4.1% to just over 101,000 tonnes.

"Although beef and lamb volume sales have fallen year on year, this was against a backdrop of exceptional sales in 2007, driven by the poor weather," said Mr Lowe.

The latest retail price spreads for beef and lamb can be found on the EBLEX website.