NFU ‘alarmed and mystified’ at price gap on beef and lamb

The NFU has expressed its frustration at the lack of positive messages coming from the supply chain to beef and lamb producers in England and Wales.

The union said beef and lamb production in England and Wales had enormous potential.

“We have the right climate to produce grass, and we have the right skills, assurance standards and infrastructure to make sure that the whole of the supply chain can be efficient and profitable.

“However, to realise this potential beef and lamb producers need clear market signals to give them confidence in the future viability of beef and lamb production.”

The NFU said current producer prices for both beef and lamb were not at realistic levels for beef and lamb finishers.

“As we enter the critical autumn period this is sending the wrong signals to purchasers of store and breeding animals. The net result is a total lack of confidence for many producers.

“In particular we are alarmed and mystified to see the widening of the gap between farm gate prices and the retail price of beef and lamb.

“At a time when the industry needs to maximise its share of the retail price the exact opposite is happening and this makes no sense at all.”

The union said the current average retail price was 424.9p/kg and the average farm gate price was 178.8p/kg.

“Therefore there is a gap of nearly 250p/kg, and we do not believe that this can be justified.

“As this position is not sustainable we are in the process of holding a series of urgent talks with retailers, processors and caterers. The message to them is clear – the price must go up.”

The union said confirmation that the OTM rule will be changed and animals born after August 1996 will be able to enter the food chain from Nov 7 was a positive signal. 

“We have spoken to major caterers and food service providers and there is recognition of the additional British beef that will become available 

“With the shortage of manufacturing beef across the EU we would expect producers’ prices for these older animals to be in line with prices in other EU member states.

“We also recently held talks with EU officials on the timescale for lifting the EU embargo on UK beef exports. 

“Once the report of the EU recent inspection of the UK controls has been published we expect to see progress on this issue with the aim of removing restrictions on UK beef exports early in 2006.”

But the union said it had big concerns about the initial period when the OTM rule is amended as the UK will still be excluded from the EU market because the beef embargo will still be in place. 

“Therefore we are discussing with DEFRA and the Commission the need for the current OTM scheme to be maintained alongside the new Older Cattle Disposal scheme until at least UK exports resume with the rest of the EU.”

With so much going on at the moment the NFU has decided to convene an additional meeting of the NFU’s national livestock board during the week commencing 26 September. 

“The purpose of this meeting is to review the NFU’s recent work on the beef and lamb market and to agree the next steps of our ongoing work aimed at securing positive market signals from the supply chain. 

“In addition, NFU livestock board members will travel to Dublin for meetings with the Irish Farmers Association to discuss the common concerns on the development of the beef market.

“We have no doubt whatsoever that there is a positive outlook for beef and lamb production in England and Wales. 

“However, we need a more realistic price, we need positive signals from the market place that provide some confidence for producers and we all need to start looking at this industry in a much more positive light.”