The report Bullish prospects, which the NFU published today, maintains that prospects for the beef industry are positive and the UK is well-placed to respond to the long term bullish market signals, by sustainably increasing production to meet the growing global demand.
However it warned that the domestic red meat consumption will be tested and the sector faces a continual squeeze between high costs and consumer demands for affordable meat. It said that “responding to tight supply and firm prices will take time and against robust demand forecasts, should keep prices buoyant in the medium term when compared to historic levels.”
In facing these challenges, the report highlights the need for a competitive beef supply chain, where everyone in the chain achieves a fair return on investment. It said that returns could be increased by focusing on consistency and quality, innovation in processing and retail sectors, and enthusiasm to boost exports. It says that highlighting the environmentally efficiency of the industry, the high standards of animal welfare, and the role of the industry in managing the landscape and environmentally sensitive habitats should help boost the image of the industry and consumer perception.
The report also tacked regulation, which is said must be “appropriate” to benefit the industry, demonstrating high standards of production, safeguarding the industry against disease and reassuring export markets.
It said: “Many beef farmers run small businesses on small margins and regulation must be appropriate. Cuts in government budgets will increase the drive to transfer costs to industry. Government must work with industry to explore better and more efficient ways of regulation in the future, including the concept of earned recognition.
Other areas covered are animal health and welfare, with a focus on TB, and CAP reform. This, it says, should be "a regime that allows farmers to focus on the market while providing a buffer against volatility".
It points out that a significant amount of the overall earnings for a livestock farmer are still provided by the single payment and agri-environment payments. "Any reforms that reduces funding or increases the restrictions on farm activity will have a direct impact on the viability of beef farms across the country," it warned.
NFU livestock board chairman Charles Sercombe said that the report would challenge many members throughout the supply chain, with some of the messages proving unpalatable. It is, he said, a broad base to work from in the years ahead.
He said: “This is our vision for a profitable, economically sustainable and internationally competitive industry but we hope that others would share this aspiration and we look forward to working towards this with partners throughout the chain in the future.
“If businesses in the processing and retail industries are concerned about future beef supply, and the indications are that they are, then we must start to work together to look about the signals being given to farmers.
“We’ve recently seen an improvement in prices on the back of tight global supply but with the increases in costs of production, many farmers are still struggling to capitalise on this. Any move to increase production inevitably depends on the belief that farmgate margins will rise to profitable levels.”
A copy of the report can be downloaded from the NFU website
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