South West finishers must work harder to widen their range of buyers, says NBA.

UK - The only way to overcome the decline in competition for prime cattle in the South West, where the base price for R4L steers is as low as 196p compared with 217p in the North of England, is to work harder at identifying new buyers outside the region.
calendar icon 27 November 2006
clock icon 2 minute read
So says the National Beef Association which is dismayed at the apparent grip on prices taken by just two big slaughter companies and the heavy reliance of the entire area on just one big retail buyer.

“Despite the very welcome efforts of local, medium range, abattoirs to widen the buying circle and capture more, higher priced, catering markets for Westcountry beef the average price for cattle in the South West remains heavily discounted compared with those recorded elsewhere,” said NBA South West chairman, Mark Thomas.

“Unfortunately slaughter capacity in the region is decreasing at the same time as the proportion of beef taken up by Tesco through St Merryn and Southern Counties Fresh Food expands.”

“And even though there are advantages in having big buyers, who take cattle regularly, it is obvious that competition in this region is extremely soft because purchasing is so heavily concentrated on just one retailer and is unlikely to be stiffened by the emergence of a third buyer moving in from elsewhere.”

However problems created by the absence of high value outlets generated by export sales, or the presence of hundreds of big city butchers and caterers, can be overcome if cattle, or beef, are moved out of the region to areas where there is more demand and more abattoirs have a wider variety of customers.

“The time has come for a more organized approach to tackle this longstanding problem. Specialist finishers need to discover new buyers further North where the same cattle can be £50-£60 a head dearer and more beef from the region, perhaps especially cow beef, could find higher prices if slaughterers themselves also established alternative trading arrangements,” said Mr Thomas.

“There is no reason why the largest finishers cannot organise themselves into a loose trading group that regularly delivers full truckloads of animals to hungry Northern buyers or use agents in the North of England to help them out instead.”

“Our fear is that the biggest purchasers can not just sit on the price, they can also push it down further if they want to, and their extremely comfortable position must be challenged if beef farming in the South West, where production costs are running well above market income, is to survive in the long term.”

“Some non-supermarket abattoirs in the region can also play their part if they take more advantage of informal trading networks with secondary wholesalers further North to open up outlets in higher priced markets that are not currently available to them.”

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