Finishers should stand firm against slaughter sector attempts
to talk down prime cattle prices and stick out strongly for further
rises over the short supplied summer period, the National Beef
Association has warned.
"The days when processors who are being squeezed by their
own customers could automatically get themselves out of income
trouble by leaning on beef farmers are over." Declared NBA
chairman, Duff Burrell .
"Everyone in the industry knows that the only possible answer
to the revenue problems the slaughter sectors is currently facing
is a steady, and prolonged, lift in retail prices because habitual
pressure on farmers is no longer an option."
"More retailers are realizing this and are beginning to inflate
shop prices so there is more money in the system and a better chance
of positive margins being generated on a cross-sector basis as
According to the NBA the outdated tactic of processors and farmers
throttling each other every time slaughter margins get tight cannot
"The supermarkets who are at last accepting this are beginning
to help by raising shop prices. Sirloin steaks have moved up around
ten per cent, or around £1 per kilo, over the past three
weeks and there appears to have been a general and very welcome,
10-12 per cent, lift in lean mince values too." said Mr. Burrell.
"These companies need all the encouragement the industry
can muster to continue to build on this constructive decision which,
if retail prices rise high enough, means there could be enough
money in the beef sector for all its participants, particularly
farmers and processors, to survive."
"It would be utterly counterproductive at this stage for
some slaughterers to slip into the lifetime habit of trying to
force down cattle prices now they are under pressure because it
is perfectly obvious both finishers, and breeders, are struggling
to win through on current income and could not handle a fall."
"It is unfortunate that some processors are mistakenly trying
to increase supplies, and reduce costs, by whipping up fears of
a repeat of last summer's market collapse and persuading finishers
to sell short."
"But feeders can, and should, counter this by firmly pointing
the EU beef supplies are tighter than ever, domestic demand is
roaring, and the market will be balanced over July and August but
right through autumn too."
"It is critical that they do not allow themselves to be bullied
by companies who have still to see that retail attitudes are beginning
to change for the better and so should hold out for more money
- not less," Mr Burrell added.
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