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Stackyard News Jun 06

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    Future beef supply for Supermarkets 'Critical'

Supermarkets must quickly establish secure supply systems for UK beef - otherwise they face empty shelves.

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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 Forster.

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 Mr Forster.

"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"

link Supermarket Price Pressure Will Hurt Consumers
link Higher prices essential to secure UK beef industry's future
link Day-Long Seminar Programme At Beef Expo


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