Beef prices hit five-year low

Britain’s beef prices have reached their lowest level in five years, according to the National Beef Association (NBA). 

Although the income reaching the producer may have dropped, the retail price saw a 1-2% increase, claimed the NBA.

“I keep getting told there is a lack of retail demand and, because of that, the processors have to reduce the price the farmer gets for his beef,” said Chris Mallon, chief executive of the NBA.

“The idea of price fatigue amongst consumers is often mentioned – i.e. beef is just too expensive. This would hold more water if the retail price had moved downwards with the cattle price, but it has not.”

Mallon highlighted that while retail prices have moved upwards by around 1%, farmers are receiving approximately 46% less of the retail price. “We believe there is room for retailers to bring back the shelf price and stimulate sales.”

The NBA called out recent in-store marketing of beef products for being “abysmal” or “non-existent”, with poorly displayed products and price promotions mainly being on imported beef.

The organisation called on the industry’s bodies and representatives to ensure that British beef was being promoted. It mentioned that supermarkets also needed to play their part, claiming that their only motivation was returning a profit.

“Family farms do not have the ability to continue to subsidise falling supermarket profits any longer,” added Mallon.

The NBA called on the supermarkets to provide 54% of retail prices to the producer and to market the product better and more clearly. It also claimed they should cease to control and interfere with the business of their suppliers.

Across the border

Meanwhile, in Scotland, this is the third consecutive spring where the industry has seen a double-digit drop in clean beef prices over the trade in late November.

The Scottish branch of the association acknowledged that, over the last four months, the pound had weakened by 16% from 69p to 80p against the euro. The weakening sterling has meant that exporting beef has become more attractive while imports have become less competitive.

It was noted by the organisation that the value of cull cows had only dropped by 3%, despite larger numbers coming forward from the dairy sector. “I am also told that there has been a shift in carcase balance, with the higher-value cuts being readily sold and chills filling up with cheaper cuts,” commented Neil McCorkindale, chairman of the Scottish Beef Association (SBA).

“This would also beg the question, why are clean cattle getting cheaper at a time when currency factors indicate the opposite?

“In the run-up to the Scottish election I would ask our politicians to consider that, over the last seven years, the value of Scotland’s food and drink industry has more than doubled. Farmgate prices on the other hand are almost exclusively lower. Does the farmer not deserve his share?” questioned McCorkindale.

The SBA said that, historically, farmers’ share of the retail price of beef had sat at around 52%. However, today it was struggling at 45%, resulting in a base price of £3.25 per kilo as opposed to £3.75.

Scotland’s food and drink sector “need to wake up” and give farmers the “fair share of the cake” before they face significant damage to their business, said the SBA. If this doesn’t happen, then government legislation may be required to protect the primary producer.

After 5 May 2016, said the SBA, the Scottish government would need to call a summit of stakeholders to set out a voluntary practice with tight targets before the need for legislation.

“No one wants legislation, but it may be the only solution,” concluded McCorkindale.

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