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Stackyard News Oct 06

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    Supermarket led beef price squeeze will end if finishers toughen up selling

The National Beef Association is advising feeders not to allow processors to take the easy way out and react to supermarket pressure on higher than expected prime cattle values by lowering payments to farmers.
NBA chairman, Duff Burrell

NBA chairman, Duff Burrell

It says price tension within the beef sector is mounting because retailers are trying to protect their margins by creating a situation in which slaughterers put a squeeze on finishers instead.

“Determined efforts are being made to force down the income of an unprofitable industry so we are advising feeders to toughen up and hold back their cattle until the short market reasserts itself and the reality of the supply situation becomes obvious,” explained NBA chairman, Duff Burrell .

“Creating the illusion of a falling market, so finishers push through more cattle to avoid being caught if the price drops further, is a tactic that abattoirs have successfully employed in the past.”

“But processors are already doing a very good job of disguising just how short cattle supplies really are and we are confident that careful marketing by farmers, in which cattle are only released to customers who pay full whack, will very quickly result in better prices and a more accurate reflection of the real balance between supply and demand.”

“Abattoirs must be discouraged from habitually taking money from the farmer as soon as they are caught in a price vice. Cattle cannot be too dear if their value does not cover their cost of production, so slaughterers who feel hard done by must turn to the retailers they supply and persuade these companies to put up more money instead.”

“There are many reasons finishers should feel confident that the market is undersupplied and if necessary, they should make determined efforts to search out the exporting abattoirs in their region and sell more cattle to them, and other non-supermarket buyers so that the message that they want, and need, realistic payments for their unsubsidised cattle really does hit home,” Mr Burrell added.

link Seriously short farm assurance cover on Republic of Ireland beef
link European Focus On Beef And Lamb
link NBA asks Bord Bia for clarification on beef exports to UK

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National Beef Association