Movement ban murders prices

By Robert Harris

LAMB prices continue to slide and cattle and pig values are under pressure as UK meat supplies, limited by movement restrictions, battle with imports for shelf space.

With little relief in the offing as the foot-and-mouth crisis builds, producers are urged to find new markets where possible.

“The lamb market is the big problem. Prices seem to be 1.80-2/kg dw, compared with 2-2.20/kg dw a week ago.

“It is a false market volumes being moved were only 30% of normal, and there is not the demand,” says NFU economist Frank Bowley.

Before the crisis broke, lamb was worth 2.50/kg on the hook.

Supermarkets stocked up with New Zealand lamb when foot-and-mouth broke out, and some insiders suggest there is enough for two weeks, says Mr Bowley.

“And farmers are trying to get hoggs off farm while abattoirs are being cagey about taking UK sheep because of the risks and extra costs involved.”

Spot pig prices have also slipped to just 90p/kg this week, says the trade, though marketing delays means many are starting to get too fat, reducing returns further.

Domestic beef is also fighting for market share, at a price.

Robert Forster of the National Beef Association blames “vast tonnages” of Irish beef, ordered by multiple retailers when the animal movement ban was announced. Irish beef was worth 160-162p/kg dw this week, about the average paid for UK beef.

Supermarkets seem reluctant to press abattoirs to pay farmers more, despite assurances last week they would do so.

“We are aware that some abattoirs are paying reduced prices to farmers. But abattoirs are facing a severe cash flow problem,” says Safeways Kevin Hawkins.

Any savings should be passed on to retailers, he believes.

“We do not want farmers to get less. But the only way to get through this is to sell more lamb and beef. We can only do that if we get prices down.”

Irish beef accounted for 75% of Safeway stock last week. “But it is less than half this week, and we will stock 100% British again as soon as possible.”

Recently released figures from the Meat and Livestock Commission show customers are actually paying much more for UK beef, lamb and pork since foot-and-mouth broke out.

But Mr Hawkins denies supermarkets have been profiteering.

He says much of the hike reflects promotions being pulled, and Safeways UK beef, pork and lamb is still priced at pre-crisis levels, he says.

Sainsbury also stopped promoting meat last week. “Our retail prices did not change at all, but a lot of offers came to an end,” says a spokesman.

Some lines will cost more from this week, he admits. “We have taken a big hit on imports.”

He could not confirm whether the rise would include UK meat. “Not all our lines are going up.”

Robert Robinson, NBA chairman, warns beef finishers, particularly in isolated areas with restricted outlets, that they will continue to receive “derisory returns” from large abattoirs supplying supermarkets unless they seek out new buyers.