WMN: Richard Haddock: Big store price wars leave beef farmers facing a catastrophe

Discussion in 'Livestock & Forage' started by News, May 8, 2014.

  1. News

    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
    Walterp likes this.
  2. Qman

    Qman Member

    Near Derby
    Richard Haddock talks more sense than all the NFU/EBLEX so called experts. He should have been President of the NFU years ago.
  3. gone up the hill

    Im always seen as negative when it comes to the NFU/ Exblex so haven't commented on the fact they have been super super quiet on the dire situation in the beef industry currently and I think that tells you all you need to know..

    Tb is the biggest reason suckler herds are fast being lost and the suckler herd faces meltdown, I used to have 80+ sucklers.. TB took all but 19 of them.. tried replacing them but as fast as I bought cows they went down with TB, have fhinshed to buying in stores to fatten, now I just get the odd reactor at most tests where as when I was running sucklers it was quite often 1 in 6 animals tested..

    Quite clearly the only beef that will be produced in a few years will be from dairy herds..

    Ref THE Tb job, read a statement by MR today responding to demands from the south west NFU that the NFU as a whole changes its viewpoint/ action plan on the TB front going forward and that the NFU should not agree to any more cattle controls unless the problem is properly dealt with in the wildlife population... his response was well: we hope the culls will be spread out across more of the country next year so we basically just have to accept any new cattle controls that are implemented... now anyone can see that next year is an election year so the industry hasn't a hope in hell of any more cull areas in 2015 and after that it will depend on the election results... but MR doesn't seem to grasp this basic fact....
    Walterp likes this.
  4. DrDunc

    DrDunc Member

    Is UK beef production about to go down the same perilous route the supermarkets led the dairy industry???:(:cry:
  5. Jock

    Jock Member

    Central Scotland
    Everything he says is correct but with the greatest of respect to the Western Morning News this needs covered on an even bigger platform for anyone to pay any notice.
    Sky press preview was covering a story in one of the papers last week saying price of beef is going to rise dramatically this year due to cold and drought in USA.
    The NFU need to get out there telling the media that the horsemeat has been replaced by cheap Polish and other Eastern European countries cow beef rather than UK farm assured stuff while at the same time pointing out that the price in the supermarket is higher than it was a year ago while farmers are getting 50p/Kg less
  6. Qman

    Qman Member

    Near Derby
    I met 5 East Midlands MEPs last night. I asked what they were going to do about TB. They all, except the Green woman, wanted to control badgers, even the Labour MEP! We also asked about the poor beef prices, several blamed supermarkets. You can tell there is an election soon!
    Walterp likes this.
  7. Walterp

    Walterp Member

    No, too many people remember the Tesco Beef Producers' Club; they'd exit the job before they'd agree to direct supply - even the most mercenary deadweight seller would see that agreeing to sell direct to Tesco et al would just be a fast exit to a bad Second Act.

    (with apologies to Raymond Chandler, who never saw Tesco but knew a lot about corrupt businesses)
  8. chipsngravy

    chipsngravy Member

    There was article in irish farmers journal in the 'farmer writes' bit regarding beef job;

    " why should I commite to a life of trying to make minimal profit"

    Interesting read.
    Yale and Walterp like this.
  9. Walterp

    Walterp Member

  10. Walterp

    Walterp Member

    Can anyone say what effect the (relative) strength of Sterling is having on beef prices? And lamb prospects?

    At least UK interest rates are in no danger of rising in the medium term...
  11. gone up the hill

    Sucks in imports and depresses exports... new season lamb is down £10/ head on last year... fat cattle... well they are getting on for £200/250 head ( and that looks likely to get worse ) down on last year...
  12. cudota

    cudota Member

    east lancashire
    you've got to think beef farmers are so much a minority when it comes to votes that mp's are going to do not alot when the majority of the vote would not pay for food at all if it where possible
  13. RobFZS

    RobFZS Member

    How can they import meat cheaper from other EU countries? what makes our beef soo much more expensive?
  14. llamedos

    llamedos New Member

    red tape, miles up on miles of it.
  15. mikep

    mikep Member

    Same rules EU wide I thought.
  16. Penmoel

    Penmoel Member

    Play to your audience, a mantra perfected by politicians.
  17. JD-Kid

    JD-Kid Member

    cheep land cheep workers etc etc etc bet yer not the same rules EU start up money etc etc

    i have said it a few times before the biggest damage going to happen to UK agri will be from the EU be it imports of product due to trade sactions people seeing that already and also rules and red tape both from the EU and with in the UK

    people bash the kiwis if i won lotto tomorrow i would be out of NZ heading to eastern europe areas before the willy rules take over here and there
    whats not to like cheep EU money ,cheep labour ,open door in to high paying markets

    word on the street russia starting to get there flocks and herds built up so they may not import so much out of countrys close to them makeing more for export in to other EU countrys ..
  18. Pedders

    Pedders Member

    West Sussex
    is this the same Dairy industry that according to another thread on here a lot of farmers are now keen to join ?
  19. RobFZS

    RobFZS Member

    they were keen, not sure what all these tits are thinking now the milk price has dropped
  20. matthew

    matthew Member

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