Beef producers received almost 50 percent of the beef retail price in 2008 - the highest proportion since 1995, according to the latest figures published by EBLEX.
Last year's average beef farmgate price of 259.60 p/kg was a 26 percent increase on 2007, while the average 2008 retail carcase price at 520 p/kg only increased by 15 percent on 2007.
Lamb producers also upped their share of the lamb retail price to 47 percent in 2008, with an average farmgate price of 296.8p/kg representing a 26 percent increase on 2007 prices. The average 2008 retail carcase price of 628.8p/kg was only 9 percent up on 2007.
Richard Lowe, EBLEX Chief Executive said the figures clearly showed margins had tightened in the processing sector: "Farmers will undoubtedly welcome the news they received a larger share of last year's retail price, but the ongoing impact of increased costs means they are still struggling to achieve real profitability.
"Meanwhile processors are now clearly battling with the challenges of the exchange rate, tightening domestic supplies and changing consumer consumption patterns as shoppers switch to cheaper cuts such as mince and stewing steak.
"The months ahead will clearly be testing times for the UK beef and lamb supply chain - particularly as the industry waits to see the wider impact of the recession work its way through the system."
Shoppers spent £634 million on fresh and frozen lamb in 2008, and £1,717 million on beef. Retail volume sales were down slightly on 2007, with beef dropping slightly by 2.3 percent to 300,986 tonnes last year. Lamb sales also dipped by 4.1 percent to just over 101,000 tonnes.
Richard Lowe added: "Although beef and lamb volume sales have fallen year on year, this was against a backdrop of exceptional sales in 2007, driven by the poor weather."
The latest figures show 8,000 tonnes of beef and just over 6,000 tonnes of sheep meat were exported during October 2008.
Total UK export volumes of beef and sheep meat from January to October 2008 at 62,000 tonnes for beef and 67,872 tonnes for sheepmeat are 30 per cent up on the equivalent period for 2007.
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