The Big Squeeze in Northern Ireland

NORTHERN IRELAND, UK - The National Beef Association is voicing their strong objection at Northern Ireland’s processors and their retail customers for squeezing producer profits.
calendar icon 10 December 2008
clock icon 3 minute read

The NBA says that these sectors are squeezing the financial life out of producer by discounting the price of average quality steers and heifers by ten per cent compared with the mainland average of 281p – when finishers in Northern Ireland, are losing so much money that they are already downsizing their businesses and could soon give them up altogether.

So says the Northern Ireland branch of the National Beef Association which is also puzzled that price fixers in the country continue to blame sluggish consumer demand for the equally sluggish slaughter cattle market when reports from the mainland consistently point to soaring retail sales and record incomes from beef at supermarket level.

"It is amazing that only the retailers appear to be enjoying this income bonanza"
NBA director, Kim Haywood

“Our factories claim it is easier to sell cow beef produced in the country than it is to sell the quality article from younger cattle but at the same time mainland consumers are undeterred by the hugely higher prices they face at shop level and are spending 12 per cent more on prime beef to take home than they did at this time last year,” pointed out NBA director, Kim Haywood.

“Total till takings from beef at supermarkets over the past three months are expected to be up by almost £4 million a week because consumers are so keen to get their hands on product sold under British labels and despite the overall 12 per cent lift in prices the drop in sales is a meagre two per cent – which makes it impossible to understand local stories of consumer price resistance.”

According to the NBA the average retail price of beef on the mainland rose by 15 per cent over the three months ending November 2nd, which included a 22 per cent leap in the value of mince, but consumers have stuck with these increases and are buying almost as much beef as they did a year ago.

“It is amazing that only the retailers appear to be enjoying this income bonanza and nothing is flowing back to the farmer whose long term commitment to cattle is essential for the future of the UK’s beef industry,” said Ms Haywood.

“NIMEA has itself said that low prices for cattle do nothing to secure supply stability for Northern Ireland’s beef sector but at present these appear to be words only because it is absolutely clear that the discount on the NI beef price, compared with the similarly bred and fed mainland product, which is sold on the same markets, is well below prices paid on the main land and could still get wider.”

“However the NBA is certain that there is still room for even greater retail price lifts and therefore even more opportunity for more money to be passed back to the farmer in the form of cattle prices that are above those currently being paid in Scotland.”

“Retail developments on the mainland are proving that demand for beef is price inelastic which means that when consumers are asked to pay more in the shops there is no proportionate reduction in sales and gross receipts for the industry are significantly greater than they were before.”

“It is true that artificially low slaughter cattle prices do NI’s beef sector great harm but now that mainland’s retailers have at long last realised that beef has been undervalued and undersold, and are happy to earn more by raising shop prices, there has never been a better chance to make sure that more is paid for Northern Ireland’s cattle too,” Ms Haywood added.

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