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Farming groups urge processors to back British farmers as beef prices plummet

The farming unions have urged processors to back British producers as beef prices drop back. 


Alex   Black

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The farming unions have urged processors to back British producers as beef prices drop back

Farming groups have urged processors to back British farmers as beef prices plummet and finishers struggle to book cattle into abattoirs.

 

Lacklustre demand and uncertainty has contributed to a substantial drop in deadweight prices, with liveweight markets also feeling the pressure.

 

NFU chief livestock adviser John Royle said some there was a lot of angst from members who had been told by processors there was little demand, coupled with the fact they had a hangover of stocks from preparations for the last Brexit deadline.

 

Mr Royle said: “Come on processors, you have got to start paying a sustainable price if you want to keep producers in businesses.”

 

He highlighted one farmer who had been unable to book in cattle for more than five weeks and the impact this would have on hitting specifications.

 

But what the industry really needed was for demand to pick up, with Mr Royle suggesting some sunny weather could help with demand for barbecue meat.

 

And he hoped producers would benefit later this year from the news China had opened market access for UK beef.

 

NFU Scotland vowed to use this week’s Royal Highland Show to lobby politicians, retailers and processors about the crisis.

 

Returns

Livestock committee chairman Jimmy Ireland said, with supermarket burgers retailing for more than 660p/kg and sirloins for more than 2,200p/kg ‘someone was making money but it was not the farmer’.

 

And with Irish producers potentially benefiting from a €100 million (£89m) compensation package, Mr Royle said there were concerns over how distorting it could be to the UK and Irish markets.

 

He added: “The interesting thing is I have looked at the price differential between Irish and British. The price has actually narrowed since the referendum, so we have been impacted just as much, if not more.”


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In Northern Ireland, UFU beef and lamb policy chairman Sam Chesney highlighted farmgate prices for beef production had dropped from 377p/kg to 342p/kg for a U-3 steer in the last 12 months.

 

Mr Chesney said: “There has been a continuous fall in the market since autumn last year and total variable costs have increased dramatically.”

 

He added farmers were being hit by input cost rises, with feed costs up 13 per cent.

 

Quiet domestic demand, uncertainty and falling leather prices were weighing on the markets.

 

In the week ended June 8, the GB all prime average deadweight price dropped to 343.9p/kg, well below prices in 2017 and 2018.

 

Demand

AHDB analyst Alex Cook said: “Processors are reportedly still moving supplies held in anticipation of Brexit. Quiet domestic demand continues to pressure the market.”

 

And the deadweight market was weighing on the liveweight markets, with store prices for continental and native breeds under pressure.

 

According to AHDB, the pressure of falling markets had weighed on store prices for continental and native types.

 

AHDB analyst Felicity Rusk said: “Those finishing cattle have reportedly been struggling to get them booked into abattoirs, due to a lack of domestic demand. This in turn may have been reducing finishers’ demand for store cattle.”

 

She added low finished prices and broadly good availability of grass may encourage producers to keep cattle on-farm longer.

 

“We expect fewer cattle will be slaughtered in the second half of this year compared to last.

“It may be cattle supplies are reduced in summer as producers hold on to animals until autumn in the hope of some recovery in finished prices.”

 

Leather demand was also hitting markets, with revenues from skins and hides falling as global demand collapsed, according to Quality Meat Scotland (QMS).

 

Footwear was the largest market for leather, using almost half of global production, with the automotive and furniture sectors also major players. About 70 per cent of leather comes from cattle.

 

Stuart Ashworth, QMS head of economic services, said there was competition from synthetics and changing consumer trends had hit traditional leather shoes.

 

“The automotive and furniture sectors have similarly been affected by alternative products for seat coverings and trim. Additionally, there has also been falling global demand for cars,” he added.

 

And falling hide prices impacted on the prices processors could pay, with declines in cattle hide prices over the past 12 months equating to 5-7p/kg.

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