12 May 2000

Fight retail giants – NSA boss

JOHN Thorley, chief executive of the National Sheep Association, warned a FUWpanel session that pressures on auction markets and small abattoirs were severe.

Both were worth defending to stop retail giants taking control of primary production. Recent bidding for mobile phone networks had shown the benefits of competition.

He was not anti-deadweight selling, but he questioned how prices would be set if most prime stock were sold that way. And a big swing to on-the-hook marketing would increase charges for selling store and breeding stock.

On a day when many speakers had urged farmers to think about adding value to their products, Mr Thorley urged caution. Costs could also be added, and it would be folly for farmers to get involved beyond their farm gates if these extra charges were not matched by improved returns.

He also forecast that many more powerful people who knew nothing about farming would want to dictate production methods. These could not be ignored, so, where there was a chance of mutual benefits, organisations like the NSA and FUW had to hold talks with them.

Dairy Crest director Tom Jones said he had little good news for beleaguered milk producers, though he suggested that the k /sterling balance would improve in a years time.

In the short term producers, who could do nothing about external factors, had to look hard at herd and financial management. The first step should be to end the obsession with yields and gross margins and think in terms of cost and margin/litre of milk sold.

Duncan Sinclair, a senior MLC economic analyst, said the beef industry was settling down after BSE, and the ending of the EUs calf processing scheme. But producers should keep an eye on a number of factors that could affect the UK market.

World Trade Organisation talks should start in earnest after the US election, and Agenda 2000 and EU enlargement would bring change. The possible easing and ending of OTMS regulations and technological developments like sexed semen would affect the volume and quality of home-killed beef available. Even the switch to area based LFA payments could alter the balance between cattle and sheep numbers in the uplands.

The NSAs John Thorley urged caution when adding value.