SOMERFIELD HAS become the first supermarket to sign up farmers for a new “cost plus” beef marketing scheme in response to likely changes under CAP reform.
In partnership with processor Hilton Food Group, the retailer is offering beef producers a forward contract at a fixed margin above the cost of production.
This is calculated independently by the Engish Beef and Lamb Executive (EBLEX) and does not include any allowance for income under the single farm payment.
Producers should therefore receive a profit margin without counting the SFP.
Spokesman Pete Williams said Somerfield would procure the beef through Blade Farming, with a set profit of £80-£100/head.
NFU president Tim Bennett, who was present at the launch of the contract at the Devon County Show, welcomed the initiative.
“These are exactly the signals that processors and retailers need to send farmers to stimulate beef production post CAP reform,” he said.