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Room Exists For Important Lift In Retail Beef Prices

27 April 2010

UK - Retailers should be preparing re-pricing schedules so they can take full advantage of the on-going consumer recovery in fresh beef consumption for home eating.

The National Beef Association, which has noted that so far this year consumer purchases are around four per cent higher than the same period in 2009 – when fears of a recession led squeeze on household incomes were at their height.

Independent surveys by Kantar World Panel (formerly TNS) show that around £4 million more was spent on fresh beef purchases over the first 12 weeks of this year compared with the same period last because more customers were taking more beef to their homes.

And there is a good chance even more could be earned as 2010 progresses – especially if there is a tactical lift in retail prices that falls in line with increased consumer interest.

“It is significant that despite the recent lift in retail beef purchases they are still down by around eight per cent in volume terms compared with the first three months of 2008 when the recession was still to be confronted,” explained NBA director, Kim Haywood.

“This points to there being further increases in beef sales over 2010 and it is important for the industry that it increases its overall earnings in line with the expected lift in consumer demand.”

“Even though the retail market is improving there has been a persistent fall in ex-farm cattle prices since mid-January which is in part the result of the one per cent decline in retail beef process recorded over the same period.”

“Fortunately consumers are now only showing more interest in beef and they are also upgrading their purchases and buying more stewing beef and expensive roast joints in preference to mince.”

“It is important that retailers earn more money from expanding sales so that much needed increased revenue can flow back through processors and then down to finishers and breeders.”

“Prime cattle prices should not be falling at a time when consumer interest in beef is rising. Beef farmers have shown surprising willingness to continue to turn out cattle since they suddenly became more reliant on market income in 2005 after decoupling of headage payments.”

“However, as the supply-price shocks facing lamb retailers already testify, there is always a danger that long-term deprivation of adequate income from the market will eventually result in beef supplies contracting to the point when income earned from beef sales at retail level shrinks because there is not enough beef to sell.”

“Retailers can avoid this type of self-inflicted wound if they gradually move their beef prices upwards across the remainder of spring and early summer.”

“Alternative beef supplies on the world market have shrunk fast, and predicted to sink further too, so tactical income adjustments that will protect the entire domestic industry by encouraging future domestic production would be a genuinely far-sighted move,” Ms Haywood added.

TheCattleSite News Desk


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