Tesco has launched what it describes as a five-year vision for British beef, promising better communication with farmers and tighter regional producer groups.
It followed a day of brainstorming with 80 of the retailer’s key beef farmers and suppliers last week.
Tesco’s director of fresh food, Steve Murrells, acknowledged the poor farm-gate returns over the last decade and said there was more that the chain could have done.
“It is essential for us to gain input from British farmers on how we move forward as, without them, we don’t have a business.
We also realise we need to give clear signals on where we see the market going, especially as regards Finest and Organic – without this it is harder for growers to plan.”
One delegate who attended the meeting said Tesco was drawing its top producers closer around it, tightening up specifications but offering better returns.
However, it seems to have moved from a policy of getting processors to offer headline prices in favour of allowing each farmer to negotiate.
South-west livestock chairman for the NFU, Richard Haddock, said it was pointless for Tesco to talk about production systems and target specifications if it was not prepared to discuss prices.
“You can’t just talk about production, because in 8-10 years, we’re not going to be there.”
He has already decided to cut his own suckler production from 350 animals to 250.
But Robert Forster of the National Beef Association welcomed Tesco’s initiative.
“They are taking the lead.
All the supermarkets are talking the talk when it comes to sourcing British supplies, but Tesco is the only one that is walking the walk.”
Mr Forster said farm-gate prices would need to rise by 40-50p/kg deadweight before they were sustainable.
“With exports about to restart on 3 May, there’s going to be a leap in the prices that the multiples have to pay.”
Several farmers at the event were quoted as welcoming Tesco’s proposals.
They were particularly keen on a closer relationship with the retailer.
Somerset farmer Ed Green said:
“I think this marks a step forward in communication between Tesco and farmers.
We have not always had a direct link in the past, so this is encouraging.”
Tesco has promised to redesign its farming website to give farmers more useful information and it also underlined the opportunities thrown up by demand for premium beef.
Organic beef sales rose 61% last year with top-range Finest beef growing by 50%.