NFU warns of beef sector shrinkage as price slump continues

With beef markets at a three-year low, the NFU is seeking a pan-industry effort to overcome what it sees as a lack of competition in the processing and retail sectors.

“There is a real danger that, without urgent action, the supply chain and government will see a bad situation rapidly worsen in the weeks ahead,” said NFU vice-president Stuart Roberts

“There is real concern that with more than 70% of cattle being processed by five or six companies who supply 10 retailers, this lack of competition allows value to be taken out of the market.”

See also: Farmer anger as EU plans to open door to South American beef

As such, beef farmers want to see retailers and processors promote Red Tractor assured British beef through in-store promotions, backed by clear labelling to help shoppers make informed choices.

“Livestock producers also expect AHDB to prioritise its resources to support promotional efforts at home and abroad, to increase consumption of British Red Tractor beef, highlighting the differential in standards of UK production,” said Mr Roberts.

Government support

But the NFU also sees a role for government, especially in the wake of news that Irish beef producers are to receive aid of €100m (£89m) from Brussels and their own government, to compensate for lower prices attributed to Brexit.

Speaking at this week’s NFU council meeting in Stoneleigh, livestock board chairman Richard Findlay said the aid package could exacerbate an already dire situation.

“The aid for the Irish alone has the potential to distort UK and EU markets, which would throw even more pressure on our already dwindling farmgate prices,” he said.

“If we do not see a reversal soon, I am really concerned that we will see a shrinkage in the industry.”

Mr Findlay also noted that hard-pressed consumers were opting for cheaper cuts and the sector had been hit by wet weather, which had limited sales of steak for barbecues.

Market data shows that finished steers are currently fetching 335p/kg dw, compared with 371p/kg dw a year ago, and continue to slide.

Devolved regions

Calls for government help have also come from Scotland and Northern Ireland.

Last week Scotland’s rural economy secretary Fergus Ewing said he had written to Defra secretary Michael Gove, calling for compensation to match the £89m bail-out granted to Irish beef farmers.

The Ulster Farmers’ Union has also written to Defra with a similar request.

But Defra has given a cool reaction to such suggestions, simply saying it “recognises the concerns of UK beef farmers and is determined to get the best deal for them as we leave the EU”.

It suggests that, unlike in Ireland, UK beef prices did not fall in the period following the EU referendum and are currently in line with the five-year average.

And it notes that Ireland’s beef and veal sector is heavily reliant on exports.