NFU President Calls For Sustainable Red Meat Prices

UK - NFU President Peter Kendall will today (Friday) warn that Britain’s beef and lamb industry could collapse if unsustainably low prices continue.
calendar icon 18 May 2007
clock icon 2 minute read
National Farmers Union

A market in crisis

Speaking at the Devon County Show, Mr Kendall will call on abattoirs and retailers to secure their UK supply base by offering producers long-term, forward priced contracts. He believes this will lead the sector towards the ultimate goal of genuine, subsidy-free profitable production.

The price of finished beef cattle has leveled off in the last 12 months and lamb prices have recently suffered a sharp downturn, further hampering livestock farm incomes which are already the lowest in the industry.

Mr Kendall said: “English beef and lamb is the finest in the world. It is in demand from consumers as never before, and its production makes a vital contribution to the management of the countryside and to the local and national economy.

“In a world in which demand for meat is growing faster than the ability to supply it, the medium to long-term economic prospects for livestock farming look bright. It would be nothing short of a tragedy if the red meat sector cannot maintain the critical mass of breeding animals to maintain supply in the short-term to take advantages of the opportunities that undoubtedly lie ahead.”

The NFU estimates that beef producers need at least an extra £1/kg to cover all costs and leave a small margin for re-investment. Similarly, the price of finished lamb would need to increase by around 62p/kg to leave a lamb finisher with a meaningful profit.

In addition to Britain’s cheap food culture, Mr Kendall will argue today’s problems are caused by the abolition of headage payments, which prompted livestock producers to subsidise unprofitable production with their SPS. British retailers and processors need to understand that in a world where support is decoupled from production, farmers must be profitable to sustain an important industry. He will also welcome moves by some retailers such as Waitrose in offering genuine forward-priced contracts for beef.

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