News
Staff Member
By Western Morning News | Posted: May 08, 2014
South Devon farmer Richard Haddock says supermarkets have paid little more than lip service to backing the home producer
Unless someone is prepared to stop retailers running beef farmers into the ground, this year’s Great British Beef Week may be the first and only event of its kind warns Richard Haddock.
Suddenly alarm bells are ringing everywhere. And all for the same reason: beef farming is in crisis.
Prices are falling, farmers are unable to cover their costs, and the entire sector is under threat.
What, I wonder, has taken people so long to wake up to what is going on? To some of us it was already apparent at Christmas what was happening.
Christmas is normally a time when the beef farmer can expect his own little yuletide bonus because prices tend to peak for the festive season as demand goes up.
This year it didn’t happen. And why? Because the market was hit by a tidal wave of cheap imports from Germany, Poland and other parts of Eastern Europe.
Supermarkets launched a vicious attack on the Christmas market, discounting to eye-wateringly low prices – for lamb as well as beef.
And that downward pressure on the domestic market has continued ever since – right through to Great British Beef Week when supermarkets have all claimed to be supporting British farmers but in reality have paid little more than lip service to backing the home producer.
The results of this wave of imports coming on top of the problems caused by TB have been catastrophic – there is no other word.
Open market beef prices have dropped by 25-30 pence a kilo – and I have some bad news for lamb producers too: forward orders for New Zealand lamb are well up, so the buoyant prices they are currently benefiting from will soon be nothing more than a memory.
On the beef front the picture is stark, even chilling. Suckler cow herds are shrinking rapidly. I know one farmer who always kept a herd of 100-plus. Recently that’s been down to 28. And when one of his bullocks went down with TB at the abattoir his son declared: “That’s enough: they are all going”.
My own case is typical of many. I’ve gone from 350 sucklers to zero in three years, partly because of TB, partly because of the impossibility of trying to trade profitably in the current market.
Producer after producer is getting out while the price for cull cows remains high. They won’t be back in a hurry – if at all. And livestock production is one of the slowest-running taps in the farming sector: even if they all decided to give it another go now it would be two years before the effects filtered through to the market.
What is driving this crazy situation is the ruthless price war between the supermarkets, now being waged on a level we have never seen before.
Each round of price cuts by one retailer is immediately greeted by an even more savage one by a rival, with the announcement dressed up as good news.
Morrisons’ decision to slash 50p off the price of beef mince last week may have been good news – for the consumer. But do the maths: 50p off £2.49 is a 20 per cent cut. Since the whole purpose of Morrisons strategy was to increase sales volume and therefore profits it’s clear it won’t be taking the hit: the pain will be passed back down the line, as usual.
Retailers like Morrisons and Tesco try to justify what they are doing by complaining they are losing market share to discounters like Aldi and Lidl. But in so doing they are refusing to accept two basic facts: that there is only so much cake (in the form of consumer spending) to go round; and that as a result of the huge cuts in benefits and welfare payments millions of families have far less available income anyway and are inevitably turning to the discounters.
Oddly enough they are doing so with a degree of confidence, too. Aldi and Lidl don’t make any pretence of what they are about: bargain basement food stores. Whereas consumers are becoming increasingly wary of the middle-ground traders such as Tesco and Morrisons whose claims to be cheaper have been shown to be not always as bona fide as they might have been.
And let’s not forget that the figures show that although retailers may have been genuinely discounting on the shelf, their own margins have been maintained or even improved thanks to the pressure they’ve been exerting on processors.
Where do we go in all this? Well don’t hold out any hope that the Groceries Code Adjudicator Christine Tacon will intervene, because this situation is not covered by her remarkably narrow remit, though it might just be worth registering for the Groceries Code Adjudicator Annual Conference on June 23 so you can ask her precisely what it is she does – or when she intends doing at least something.
Sadly I can only see the suckler beef sector being run into the ground. Perhaps shoppers will wake up to what’s going on at some point when all they are offered is imported beef. But by then it will be too late and they will have no option but to buy it.
Reproduced by kind permission of Western Morning News newsroom
See the original article here:
Read more: http://www.westernmorningnews.co.uk...ory-21072965-detail/story.html?#ixzz3192qVo5U
South Devon farmer Richard Haddock says supermarkets have paid little more than lip service to backing the home producer
Unless someone is prepared to stop retailers running beef farmers into the ground, this year’s Great British Beef Week may be the first and only event of its kind warns Richard Haddock.
Suddenly alarm bells are ringing everywhere. And all for the same reason: beef farming is in crisis.
Prices are falling, farmers are unable to cover their costs, and the entire sector is under threat.
What, I wonder, has taken people so long to wake up to what is going on? To some of us it was already apparent at Christmas what was happening.
Christmas is normally a time when the beef farmer can expect his own little yuletide bonus because prices tend to peak for the festive season as demand goes up.
This year it didn’t happen. And why? Because the market was hit by a tidal wave of cheap imports from Germany, Poland and other parts of Eastern Europe.
Supermarkets launched a vicious attack on the Christmas market, discounting to eye-wateringly low prices – for lamb as well as beef.
And that downward pressure on the domestic market has continued ever since – right through to Great British Beef Week when supermarkets have all claimed to be supporting British farmers but in reality have paid little more than lip service to backing the home producer.
The results of this wave of imports coming on top of the problems caused by TB have been catastrophic – there is no other word.
Open market beef prices have dropped by 25-30 pence a kilo – and I have some bad news for lamb producers too: forward orders for New Zealand lamb are well up, so the buoyant prices they are currently benefiting from will soon be nothing more than a memory.
On the beef front the picture is stark, even chilling. Suckler cow herds are shrinking rapidly. I know one farmer who always kept a herd of 100-plus. Recently that’s been down to 28. And when one of his bullocks went down with TB at the abattoir his son declared: “That’s enough: they are all going”.
My own case is typical of many. I’ve gone from 350 sucklers to zero in three years, partly because of TB, partly because of the impossibility of trying to trade profitably in the current market.
Producer after producer is getting out while the price for cull cows remains high. They won’t be back in a hurry – if at all. And livestock production is one of the slowest-running taps in the farming sector: even if they all decided to give it another go now it would be two years before the effects filtered through to the market.
What is driving this crazy situation is the ruthless price war between the supermarkets, now being waged on a level we have never seen before.
Each round of price cuts by one retailer is immediately greeted by an even more savage one by a rival, with the announcement dressed up as good news.
Morrisons’ decision to slash 50p off the price of beef mince last week may have been good news – for the consumer. But do the maths: 50p off £2.49 is a 20 per cent cut. Since the whole purpose of Morrisons strategy was to increase sales volume and therefore profits it’s clear it won’t be taking the hit: the pain will be passed back down the line, as usual.
Retailers like Morrisons and Tesco try to justify what they are doing by complaining they are losing market share to discounters like Aldi and Lidl. But in so doing they are refusing to accept two basic facts: that there is only so much cake (in the form of consumer spending) to go round; and that as a result of the huge cuts in benefits and welfare payments millions of families have far less available income anyway and are inevitably turning to the discounters.
Oddly enough they are doing so with a degree of confidence, too. Aldi and Lidl don’t make any pretence of what they are about: bargain basement food stores. Whereas consumers are becoming increasingly wary of the middle-ground traders such as Tesco and Morrisons whose claims to be cheaper have been shown to be not always as bona fide as they might have been.
And let’s not forget that the figures show that although retailers may have been genuinely discounting on the shelf, their own margins have been maintained or even improved thanks to the pressure they’ve been exerting on processors.
Where do we go in all this? Well don’t hold out any hope that the Groceries Code Adjudicator Christine Tacon will intervene, because this situation is not covered by her remarkably narrow remit, though it might just be worth registering for the Groceries Code Adjudicator Annual Conference on June 23 so you can ask her precisely what it is she does – or when she intends doing at least something.
Sadly I can only see the suckler beef sector being run into the ground. Perhaps shoppers will wake up to what’s going on at some point when all they are offered is imported beef. But by then it will be too late and they will have no option but to buy it.
Reproduced by kind permission of Western Morning News newsroom
See the original article here:
Read more: http://www.westernmorningnews.co.uk...ory-21072965-detail/story.html?#ixzz3192qVo5U
