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Production Figures a Mixed Bag for Beef Industry

18 September 2009
National Farmers Union

UK - New production figures released by EBLEX give rise to optimism for beef finishers but show suckler production is still an area of concern according to the British National Farmers' Union.

The figures have been released ahead of the publication of Eblex’s full Business Pointers report in October and show production costs per kilo for the first time.

NFU livestock board chairman Alistair Mackintosh said: “While we are pleased that some finishers are now seeing a degree of well overdue profitability as a result of the finished beef price being higher than their costs of production we remain extremely concerned that both lowland and LFA suckler producers are still not seeing market prices covering their production costs.

“This is an ongoing issue which is no longer sustainable and is, in turn, leading to further reductions in the national suckler herd. The retailing and processing end of the beef supply chain needs to realise that suckler producers cannot continue to produce at a loss, and without the suckler supply base the beef industry will struggle to secure domestic beef supplies.

“Consumers recognise the quality and safety of British beef and we need the supply chain to work together to safeguard its future supply.”

Mr Mackintosh said the finishing figures were encouraging, and meant finishers would be able to invest in their businesses, but it was vital all parts of the supply chain were profitable or else the chain would break down. Input price spikes during the last year had caused cost increases in all areas of the sector.

He added: “It is also encouraging to see further improvements in the physical performance of all beef production systems. Producers have looked carefully at their businesses and at ways to streamline their systems by cutting costs and improving physical performance. These figures show improvements across the board and illustrate their desire and hunger to improve and stay in business. However, this needs to be recognised by the rest of the supply chain.”

The National Beef Association has welcomed the figures from EBLEX.

Kim-Marie Haywood, Director of the NBA, said the Business Pointers production figures show that there have been good improvements made by producers across the board.

"Reviewing the figures at this early stage clearly indicates that farmers have made great inroads into improving their fixed cost efficiencies and marketing cattle into the right outlets," said Ms Haywood.

"The figures for finishers show the fruits of the efforts being made by producers to improve their technical performance, helped by initiatives like EBLEX’s Better Returns Programme.

"But to have a sustainable beef industry, every type of enterprise needs to make a profit and that is simply not the case at the moment.

"Farmers are doing their bit to increase efficiency but we would like to see processors and retailers playing a greater part in helping the grassroots producers turn a profit from their enterprises and so support the long-term future of the sector."

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