Shock price stories distort 20-year earnings decline

Eblex has criticised recent coverage of rising meat prices for giving a distorted picture of the market. Scare stories have intensified in recent weeks, leading the public to believe that the industry is earning ever more for its products. In fact, wholesale levels have fallen during the past 20 years, MTJ research has found.

"Despite significant recent coverage in the media about rising meat prices, the reality is that farm gate prices for beef have reduced by nearly 29% in real terms since 1990," said Mark Topliff, senior analyst for Eblex. "Sheep prices have fared slightly better, but it is only a modest change and only something that has happened in very recent months."

According to AHDB figures, the beef price has dropped significantly in the past 20 years when the effects of inflation are taken into account. Deadweight cattle has fallen from 380p/kg in January 1990 to 271.8p/kg in March 2010. Even without factoring inflation into the equation, beef prices rose marginally, by 63.5p over the period.

Deadweight pig prices have fallen significantly in real terms, from 191.7p/kg down to 143.5p/kg. The average farm price of pork also dropped in the week ended 4 September, down 3p to 144p/kg.

The lamb market has increased in line with reports. However, the increase against inflation, up from an indexed figure of 373.5p/kg to 403.4p/kg is less significant.

Recent retail prices have remained steady, increasing slightly for beef and pork in the past few months, with small falls in August for lamb.

Despite this, wholesale butcher Frank Barry told the BBC: "It's got to the point where you put meat on the scale and feel embarrassed to quote the price to your customer. Year-on-year we've seen increases and we pass the price on to customers."

However John Mercer, chief livestock advisor at the NFU, insisted: "Meat is still relatively cheap for the consumer, and in most cases the producer is not better off. Certainly in the case of beef, many farmers are struggling and not making a return. Lamb prices have improved, but this is on the back of a number of years of disappointing returns."

On a global level, meat prices are at their highest since 1990 on the UN Food and Agriculture Organisation's index, up 16% on last year.

>> Beef prices must rise, warn farmers

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>> Asda launches fixed prices for beef suckler producers

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