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Stackyard News Jul 07
       

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Supermarket Opportunity to Lift Price of Beef
17/07/07

Rising grain and fresh milk prices are gifting the major supermarkets with a long awaited opportunity to lift the value of retail beef and build the cross-supply chain income cascade that is the only way to move well-organized beef production into profit.

NBA chief executive, Robert Forster

Robert Forster

So says the National Beef Association which wants to underline the importance to UK agriculture, and the beef industry, of the 40 per cent increase in ex-farm grain prices since April and the 60 per cent per cent rise in the July spot price in liquid milk compared with last year.

“Efficient breeders and finishers are still routinely selling beef cattle for significantly less than the cost of production and unless there is a compensatory lift in retail prices, and an income cascade led by increased consumer spending is created to cover the costs of retailers, processors and farmers, the beef industry will continue to face a hesitant future because no one in the supply chain is making money,” explained the Association’s retiring chief executive, Robert Forster.

“The market messages, each of them driven by the contracting national and international supplies that are already impacting on grain and milk are clear.”

“They underline the fact that all domestic commodities, including beef, have been savagely under priced for too long and reinforce the long held proposition that retailers can no longer ignore the fact that the time for an urgent and permanent upward adjustment in the value of all temperate primary farm products has at last arrived.”

According to the NBA all retailers have two important reasons to raise their beef prices immediately. The first is the additional cost more expensive grain will hoist on finishers who are already selling cattle at a loss.

And the second is that even the UK’s tightly controlled primary product markets cannot escape the new pressures on world food markets created by expanding global demand and contracting production resource

“The grain led cost squeeze on poultry and pig production through higher grain prices will soon provoke a rise in the retail price of chicken and pork – and sensible retailers should see this as a God given chance to introduce a proportionate lift in the beef retail price to maintain shelf value differentials,” said Mr Forster.

“The interest raise squeeze on consumer spending is not an excuse to delay this because householders faced with cuts in disposable income will be driven away from expensive meals in restaurants and back to much cheaper fresh food purchases which they will cook themselves.”

“This will happen at the same time as there is worldwide food price inflation as a result of more people earning enough money to join the international meat eating club and an increasing squeeze on food production as more of the best land is diverted into bio-fuel crops or acquired for urban development.”

“This wave is already hitting the UK’s grain and dairy sectors and from the point of view of long term red meat supply sustainability, and their own beef supply security, it is important that retailers introduce their own counter measures now.”

link Are Beef Importers Putting Pressure on UK Prices?
link EBLEX Beefs Up Eating Quality
link Calf Rearing Opportunities for Younger Farmers

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