NBA warning on beef prices
Published:  05 March, 2008

Retailers must improve carcase balance and increase prices if beef production is to remain viable, warns the National Beef Association (NBA).

The NBA says it is disappointed that, instead, retailers are pinning their hopes on false expectations of more feeding cattle moving on to the market and finishers being prepared to accept a price reduction for slaughter stock as soon as expensive grain is being fed in lower quantities.

"There is no way that enough cattle will be produced anywhere in Europe, at any time in the near future, for retailers to be able to resume their long-standing habit of squeezing ex-farm prices at the first hint of a buyer's market," explained NBA director Kim Haywood.

"Purchasing habits acquired over decades of over-production within the EU should have already been jettisoned, but buyers, who for the first time are facing an embedded sellers' market, still have a chance to fall in with the 180-degree turn in tactics that is required if they are to prevent more cattle farmers from throwing in the towel and their domestic supply base from shrinking further."

According to the NBA, developing beef and cattle shortages across domestic, EU and world spectrums mean retailers can no longer collectively resist in-store price rises and, instead, must persuade consumers that they have to pay more for their beef.

"One tactic could be to refresh tired selling lines which are dominated by mince, steak, stewing meat and roasts, and introduce attractive new lines, mainly taken from the forequarter, which raise the value of the entire carcase," said Haywood.

"The oyster blade muscle should be extracted from all forequarters and sold at a discounted value to sirloin steak as a good eating and affordable alternative. Boring displays can be made more attractive through the introduction of novelty items, such as kebabs and good quality beefburgers, and more value must be added to flank meat through more pre-sale preparation too.

"Beef in supermarkets is being sold in ways that have hardly changed for decades. Retailers are focusing on only around eight selling lines, but if they raised this to 15, they would earn more from the £1,000 carcases their processors are having to buy - and the entire supply chain would instantly feel more secure," said Haywood.

"The message the NBA is getting is that retailers are resisting this innovation because alterations would then have to be made to computerised ordering systems and their routine management of in-shop displays."

"However it is quite clear that without more income more beef farmers will leave the industry, there was a nine per cent reduction in Northern Ireland's suckler herd last year, and on top of that domestic processors will soon be selling even more beef onto the supply starved Continental market.

"To counter this, retailers must accept what is already obvious and not hark back to history that will not be repeated. There is no way that the fall out from the developing shortage of cattle can be avoided so they must protect themselves, and their supply chain, by persuading consumers to pay more for beef on a long-term basis.

"If they do not, they will lose more beef to the export market and it will not be long before their customers will also go short because they have not been asked to pay enough to keep the supply chain in business.

"Retailers must raise their own creativity and pursue an organised drive to improve carcase balance. There have been no moves to introduce innovative new cuts for at least 15 years," Haywood added.

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