Beef industry benchmark figures fail to take into account farmers’ true costs of production says the National Beef Association.
That is because enterprise costings, such as those published by the English Beef and Lamb Executive last week, do not include farmers’ own labour, business drawings, or reinvestment funds.
NBA chairman Duff Burrell was concerned it was giving retailers and processors a misleading idea of livestock profitability.
“It beggars belief to think that discussions on the future of the beef industry are being based on the false assumption that farmers are prepared to work for nothing, live on nothing and set nothing aside to finance management changes,” he said.
Once a farmer’s own labour was included, even at the modest cost of £10,000 a year, the average cost per kg jumped to 300p/kg, he claimed.
Mr Burrell called for the adoption of a nationwide formula to calculate beef production costs.
He also criticised the recent EBLEX costings for including beef special premium and slaughter premium payments some animals would have benefited from.
But Meat and Livestock Commission economics manager Duncan Sinclair defended the figures as a valuable snapshot of production, based on farmers’ own accounts.
“We did not want to include information that is already available in DEFRA’s Farm Business Survey.”
And as the data gathered ran up to March 2005, it was essential to include the incremental value of direct subsidies associated with those animals, he said.