Opportunistic Price Cutting Will Be Kiss Of Death To Livestock Industry

UK - NFU Vice-President Paul Temple will warn that opportunistic price-cutting by meat processors will destroy the red meat industry in England, when he speaks to NFU members at the Royal Bath and West Show at Shepton Mallet today, Wednesday.

4 June 2007

2 minute read

Europe

He will call for a shared commitment between producers, abattoirs and retailers to ride out market squalls and move the sector towards sustainable prices that provide a fair return for some of the finest products in the world.

Mr Temple, who produces beef cattle on his own farm in Yorkshire, was sharply critical of the price cut announced this week by one of the South West’s leading regional abattoirs, which he said was not justified by the underlying market position.

“The long-term trend in beef consumption is upwards, and in production, it is downwards”, said Mr Temple*.

“Abattoirs should be working with retailers to build on that platform by lifting prices so as to close the huge shortfall that still exists between market returns and production costs.

“Instead of which, the tendency in the abattoir sector is still to take advantage of any and every short-term hiccup in the market to drop prices to producers by as much as they think they can get away with.

“This sort of cynical opportunism will be the kiss of death to producer confidence and it will be the kiss of death to the whole livestock industry in England if it carries on”, he warned.

Mr Temple referred to the report produced recently by the NFU on the threats to beef and lamb production in England, entitled “Warning – industry and countryside at risk”.

This argues the decline in beef and lamb production could accelerate rapidly, with disastrous consequences for the economy and the environment, if the entire production chain does not unite in finding long-term contractual arrangements geared to creating sustainable supply chains

According to the Meat and Livestock Commission, cattle slaughterings in GB fell by 13 per cent in the week ended May 13 compared with the same period last year. Household purchases of fresh and frozen beef rose by one per cent in the 12 week period ended April 22. Crucially, the difference between the price paid to the beef producer and the average retail price of beef widened by over three per cent in April 2007 as compared with the same month last year.