Beef supplies under serious threat, NFU warns

Beef supplies could be under threat if prices continue to fall, farmers have warned. The National Farmers' Union said the the drop in price was knocking producer confidence and undermining the long-term sustainability of UK production.

The warning came after figures published by Eblex show the farm retail price spread has hit a high of 53.2%, 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/kg, 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 is being driven by promotions. I believe there is scope to re-balance returns from the carcase 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 current situation could lead to if it is not resolved. If processors 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 producers must 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 effect that the oversupply situation has on the beef price and tailor their marketing strategy in order to maximise their returns.

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