The food chain must not take advantage of the foot and mouth outbreak to push down livestock prices, according to farmers.

The livestock movement ban is already estimated to be costing the industry £10m/week in lost trade.

And a group of 100 sheep farmers from Northumberland have agreed that they should not sell lamb for less than it is worth once abattoirs start taking animals for slaughter. The lamb price averaged around 250p/kg/dw in Northern markets last week.

It is estimated that the farmers attending the meeting at Wooler would together have a supply of 30- 40,000 lambs.

The industry is still waiting to see when movements to slaughter will commence.

But farmers are already fearful that without live markets to set a true market value, prices will plummet as happened during the 2001 foot-and-mouth outbreak.

Graham Dixon of Alwinton Farm in Northumberland said a meeting had taken place on Monday night (6 August) in order for producers to develop a strategy for marketing their livestock.

”Initially the price is likely to be acceptable, because processors will just be glad to have supplies. But after that the situation could become dire,” he said.

NFU livestock board vice chairman Malcolm Corbett added: “Since the meeting it has become clear that some slaughterers are prepared to offer around 250p for lambs when permission to begin processing has been given – and this has to be a hopeful sign.

“However farmers at Wooler made it quite clear that their main concern was the impact of the EU export ban on lamb prices later this season.”

“They were in no mood to see the value of their lambs plummet this autumn and are prepared to work with other farmers to do their best to resist unnecessary price predation, and also put a bottom in the market, should circumstances make this necessary.”

NFU livestock board chairman Thomas Binns said that during the 2001 crisis prices crashed as movement restriction plunged the industry into chaos and producers felt forced to sell for whatever price they could get.

For example, Mr Binns said fat lambs making £44-45 before the disease struck in 2001 went on to sell for only £28.

“We will be on watch for anybody abusing the circumstances farmers find themselves in.”

Mr Binns said there was no evidence this was happening yet but he urged supermarkets to come out publicly to support farmers.

“If there was ever an opportunity to show solidarity with British farming this is it.”

He conceded that a limited drop in prices was likely following the ban on livestock exports – 20% of lambs were sent abroad in one way or another – but said farmers would not accept the falls seen in 2001.

“I don’t think they will submit so quickly to a poor market this time. If there are massive swings a lot of people will stay out of the market.”

National Sheep Association chief excutive Peter Morris said: “The last thing the UK sheep industry needs when movements return is to see prices crumble. Consumption figures remain good and so this need not be the case. NSA calls on all abattoirs, processers and retailers to do the decent thing and not kick producers in the wallet when they are already down.”

Have your say on price prospects on the FWiSpace forums.

For more on the foot and mouth outbreak see the FWi special report.