British Beef Prices have Dropped to a 5 Year Low
5th April 2016
Here the National Beef Association take a look at the situation and the producers relationship with the retailers
Beef prices have now dropped to a five year low and yet the retail price has remained relatively static with a 1-2% increase.
Here Chris Mallon, Chief Executive of the National Beef Association (NBA), commenting said: “I keep getting told there is a lack of retail demand and because of that the processors have to reduce the price the farmer gets for his beef.
“The idea of price fatigue amongst consumers is often mentioned, i.e. beef is just too expensive, this would hold more water if retail price had moved downwards with the cattle price, but it has not.”
Chris continues: “The truth is retail price has moved up 1%, whilst on farm prices have been slowly, week by week, coming back to a point where farmers are getting around 46% or less of retail price. We believe there is room for retailers to bring back shelf price and stimulate sales.”
The recent in-store marketing of beef has been either abysmal or non-existent with product poorly displayed, and price promotions mainly on imported beef products.
In addition to price as a factor of sales, there needs to be promotion of the product. In recent years beef promotion has been obvious by its absence. Who has the responsibility to market our product? Of course it starts with the producer ensuring quality, but once it leaves our hands who should this responsibility fall to? AHDB has a duty, as our levy body, to allocate a share of our levy to keeping beef in the minds of consumers, but what is the responsibility of the supermarkets, at the moment they seem to have no interest in UK beef. Their only interest being to return a profit, and at the moment that is at the cost of the producer. The loyalty of retailers does not last beyond the last horse burger being eaten.
Chris said: “Family farms do not have the ability to continue to subsidise falling supermarket profits any longer.”
Retailers need to give a fair share, 54% of the retail price, to the producer, market the product better and more clearly, and most importantly stop controlling and interfering in the businesses of their suppliers. The continual interest in our cost of production is for one reason and that is to continue driving the value of our stock downwards.