Supermarket beef price lift must match farm level values
27/06/05

An encouraging rise in supermarket beef prices has still to be matched by a corresponding lift in prime cattle values at farm level.

So says the National Beef Association which notes that lean steak mince sold in Tesco, Asda, Sainsbury and Morrisons is on average 21.7 per cent dearer than it was in mid-January and that prices for own brand rump steak are up by 16.8 per cent too.

"These figures, which are published by The Grocer magazine, are welcomed by the NBA because it is easier for retailers to pay processors more for the beef they buy if they in turn are selling it for more money to consumers," explained Association chief executive, Robert Forster.

"However we also note that current domestic prime cattle averages are almost exactly the same as those paid at this time last year while the average rise recorded across all other EU countries is higher by at least eight per cent."

"This means that additional income generated within the UK distribution chain has still to be passed back to finishers who are desperately in need of positive price encouragement as they face up to net income drops as a result of the disappearance of £54 from their top line since the ending of slaughter premium and then the absence of more substantial BSP payments on an increasing number of male cattle."

According to the NBA the most recent retail price trends show an average 10.4 per cent increase in rump steak values over the last six weeks while steak mince sold in the four most influential multiples has jumped by 6.4 per cent over the same period too.

"We are asking questions about why these income increases have not yet been passed back and one of the answers is that so many steers and bulls are still coming out of BSP retention that slaughterers are overwhelmed with cattle and feel no need to push up prices," said Mr Forster.

"However it will be a different story when the rush of BSP cattle dries up and the very obvious drop in dairy beef production, particularly Holstein bulls, begins to bite too."

"Our most recent information is that in some instances retail beef prices have lifted by three per cent over the last month on an all-cuts basis and while this may not apply to every retail outlet it is certainly a signal that general upward movement is taking place."

"We have already told retailers that the only way they can be sure of getting the beef they want, in the quantity they want, and at the time they want it, is to very quickly make sure feeders are paid much more than they are at present."

"We are also expecting shop prices to rise further, and for farmers to be paid more money, as the accuracy of the supply message we have been emphasising at last sinks in and more retailers accept they have to work harder at making sure home-produced beef continues to be available to them," Mr Forster added.