Farmers call for perspective on meat prices

30 August, 2007

The NFU has responded to the recent media storm over rising meat prices and urged for perspective about the reasons behind price increases.

Writing in the latest edition of the NFU's magazine British Farmer and Grower, NFU chief economist Carmen Suarez said setting the record straight and correcting some of the most common misconceptions was vital for a farming community suffering from years of cheap food culture.

"Farmers know all too well that, despite being part of the same supply chain, increases in retail prices and in wholesale prices do not necessarily result in a jump in the prices paid to farmers," she said.

"In the last 20 years, food retail prices have increased by over 50 per cent, while farmgate prices have stagnated. Similarly, the impact of increases in commodity or wholesale prices on farmgate prices is far from immediate or proportional."

Suarez said food was now cheaper and more affordable than ever while farmgate prices had continued to decline in real terms.

In the last 20 years food has become 20% cheaper in real terms and the average British family spends less that one tenth of its income on food compared to one third sixty years ago.

Farmgate prices, on the other hand have continued to decline in real terms and if they had grown during the past 100 years at the same rate as the general cost of living they would be, on average, four times higher than their current levels.

"Recent increases in commodity prices are a reflection of global demand and supply conditions and represent an opportunity for British farmers to benefit from a long-awaited and overdue recovery in farmgate prices," said Suarez.

"Commodity price increases do not represent the threat to consumers, to the economy or to developing countries that some have been all too keen to depict.

"And, to the extent that they translate to higher farmgate prices, they will be good news not only for British farmers but also for the rural economy, as it could mean more resources becoming available for countryside management, more investment in farm infrastructure, and fewer farming families being forced to leave the land."





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