Look after your beef suppliers, says NBA

Feb 26 2008 by Tom Patterson, The Journal

TIGHTER supplies at world, EU and UK levels will continue to support domestic slaughter cattle prices, says the National Beef Association.

This, it adds, means retailers must adopt a new approach and secure their supply chains by paying processors much more for beef than they do at present.

The NBA is certain that new international and domestic beef supply pressures mean it is no longer sensible or realistic for slaughterers to force down ex-farm prices as soon as they think more finished stock might be coming forward.

It argues that current value fixing tactics, in which retailers consistently sell beef for less than the cost of production, and leave farmers and processors to operate with no profit margins, will have to be abandoned.

“The time has come for a complete rethink, warned NBA director Kim Haywood.

“Coupled subsidies disappeared more than three years ago, world food supplies are getting shorter by the day, and both retailers and processors can no longer afford to risk future supplies by consistently under-pricing their producers’ cattle.

“The traditional response of abattoirs faced with an uncomfortable period of unexpectedly high cattle prices has been to bear the loss stoically but be alert for the earliest possible opportunity to force down the market and recoup their margins.

“But they have to change tactics because it is them, not the feeder, who is going to be squeezed unless they make sure retailers understand they must pay more for deliveries and allow their suppliers to cover the cost of increasingly expensive cattle and enjoy a sensible net margin too.”

He added: “Experienced finishers are well aware of the global supply shortages that are driving the market and the biggest, most serious operators are determined to take advantage of this long-awaited chance to secure their futures.”

“These are exactly the type of professional suppliers that mainstream slaughterers prize and they are going to have to be looked after.

“Consumers and retailers are going to have to pay more for beef and if they do not producers will be forced to change their supply routes.”