Britain’s supermarket chains were challenged at today’s (Monday, November 30) Royal Welsh Winter Fair to keep a steady and consistent flow of home produced lamb and beef on their shelves in 2016 and avoid ’the shattering shards and spikes of oversupply that puncture prices and splinter the industry’.
The support us plea came from Hybu Cig Cymru chairman, Dai Davies, who told a breakfast industry gathering that collective responsibility was the only way forward.
“It is vital that our local butcher’s shops and, crucially, our supermarket outlets step up to the plate and stock, promote and sell our PGI branded products,” he said.
“I believe our multiple retailers increasingly understand that they have to balance a moral responsibility for the domestic economy with a commercial necessity to maintain a consistent supply to their customers and avoid, however tempting, the short-term opportunistic returns that provoke the shattering shards and spikes of oversupply that puncture prices and splinter our industry.
“Collectively we all have a role in finding a workable supply solution,” he added.
The average Welsh farm was around £7,000 worse off just because of the variations in the Sterling-Euro exchange rate alone. Two years ago, the pound was worth 1.16 euro, today it was 1.43 euro, with each sheep on the farm worth £60 today, instead of the £72 two years ago.
“We know only too well inside the agricultural industry the turbulence created by living and working in the global marketplace - but it does offer huge opportunities for the advancement of high quality, premium products such as PGI Welsh Lamb and Welsh Beef. Without exports returns would have been far worse this year,” said Mr Davies.
“Industry experts say there will be a little less production in Australia and New Zealand in 2016 because of adverse climate impacts and that may have a positive effect on prices here for a while.
“But the stern challenge facing each farming business is the need to deliver at a viable and sustainable cost of production.
“The cold truth is that this industry is unsustainable unless we can produce at a profit within market price,” he added.
“HCC’s latest statistics on farm cost of production, which will be available in more detail in a few weeks, show that the challenge remains as stark as it has ever been, with overall costs rising and a percentage of Welsh farms unable to even cover costs of production let alone returning a profit.”