Supermarkets must quickly establish secure supply systems for
UK beef - otherwise they face empty shelves.
The National Beef Association has written to the chief executives
of the UK's four major multiples warning that future beef supply
security is already more critical than it has ever been - and
continuation of current, over competitive, retail pricing policies
will undermine domestic beef supplies still further.
The Association has also forecast a world beef deficit in five
years time and stressed that if the four supermarket giants do
not organise a reliable domestic supply system in the months
still available to them it is impossible to see where alternative
deliveries can be found in the medium term.
"The cure for this serious supply problem is an immediate
rise in the retail price because it alone can introduce urgently
needed financial oxygen into a domestic production and distribution
system that is slowly suffocating because positive margins continue
to be non-existent," explained NBA chief executive, Robert
The Association has advised the chief executives that there
is little point in looking outside the UK for beef because world
markets are already tight.
"We have told them it is obvious that South America can
no longer be regarded as safe source of supply because continuing
disease problems in Brazil, and political decisions in Argentina,
have substantially increased the risk of regular supply disruptions," said
"On top of this there is more competition for beef from
Brazil which at present is the only provider of a meaningful
export surplus at world level".
"An increasing proportion of the current Brazilian export
surplus will soon be re-directed onto its expanding domestic
market and further upward lifts in the world economy will generate
even more competition for spare Brazilian product which will
result in many would-be customers, many of then in the UK and
elsewhere in the EU, facing short supplies."
"As a result it is possible that in as little as five years
time world beef supplies will be in deficit as more consumers
in South East Asia, the Indian sub-continent, and the former
Soviet bloc join the world's beef eating club - and this has
very obvious implications for each of our supermarket giants
and their competitors."
The NBA has also pointed that recent violent changes to the
EU agricultural support system have already forced many UK farmers
to cut beef production because costs are substantially higher
than market income and has predicted that unless there are further,
progressive, increases in the market price for beef cattle further
unwelcome falls in UK beef production are inevitable.
"There is evidence of a continuing fall in breeding cattle
numbers in UK agricultural census data and the NBA is certain
there will be further production drops unless farmers can be
encouraged by income increases into thinking that commitment
to beef production is a sensible proposition," said Mr Forster.
"The supermarket chiefs have been advised that a further
decrease in UK beef production would not be in their interests
and that June 2006 would be an ideal time for each of them to
substantially review its pricing policies for beef and allow
them to be shaped by long term supply security considerations
instead of discount pricing that is so competitive it is damaging
their own margins too"
Price Pressure Will Hurt Consumers
Higher prices essential to secure UK beef industry's future
Seminar Programme At Beef Expo