No Positive Price Signal For Beef Sector

FARMING UK - Hard pressed beef farmers are still waiting for a positive price signal from supermarkets and other influential buyers that will encourage them to stay in business.
calendar icon 24 July 2007
clock icon 2 minute read
Positive market developments in the cereals sector have already changed attitudes to continued production with more land expected to be turned over to grain now that more of the world's wheat is being used as bio-fuel.

And the alarming exodus of dairy farmers, which has seen UK milk production plunge persistently below quota, is expected to at least brake to a halt, if not reverse, now the world market is signalling a global shortage.

"But beef farmers, who for years have consistently turned out their cattle for less than the cost of production, have yet to be reassured that their product is wanted and that buyers are willing to pay the right price to secure it," warned National Beef Association chairman, Duff Burrell.

"If there is no response from the market some beef farmers will be tempted to offer suitable land to cereal growers if they do not turn it back to grain themselves."

"And the migration of cash starved dairy farmers into beef, which up until now has disguised production cut backs on established beef farms, will slam to a halt if spot milk prices continue to demonstrate that they too have at last found a real market."

According to the NBA retailers cannot dawdle on beef any longer.

"They seem to think it can be produced at a loss without doing anything positive to show that they too are willing to play their part in securing a sustainable domestic supply," said Mr Burrell.

"Ever since decoupling in 2005 the NBA has warned that beef does not grow on trees and if beef farmers are to stay in production as SFP declines, and then disappears, they need enough return on their product to cover production costs and then drawings and investment income too."

"The welcome signals in cereals and milk underline that crunch time in the beef sector is now approaching. The level of future beef production in the UK is firmly in the hands of the big retailers and burger manufacturers."

"There is ample evidence to show that consumers are prepared for a retail price rise and that underpricing is not necessary to maintain sales. If they do not bite the bullet quickly they will have no one to blame for a shortfall in supplies but themselves," Mr Burrell added.
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