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‘Local beef farmers could go out of business’

 
Created on 19/10/2010 @ 10:19
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The decline in beef prices are putting the squeeze on local farmers and threatening the industry’s future, according to a claim by NFU Cymru.
Members of NFU Cymru’s Livestock Board have warned that the low beef price has left producers operating below the cost of production and there are very real fears that production costs will inevitably continue to escalate on the back of rising feed and bedding costs expected this winter.
Worried NFU Cymru Livestock Chairman Peter Davies said: “The continuing year-long decline in the beef price is now really threatening the long term sustainability of beef production with many producers seriously questioning their future in the industry.
“The supply chain appears only too willing to comment on the need to secure supply on a long-term basis but the short-term approach being taken illustrates that the market is failing to deliver. At current prices beef producers will be unable to afford to produce beef this winter and some are starting to seriously question their future in the industry. This situation is made even more precarious by the volatile market conditions for inputs which we have witnessed in recent months. The drought in Russia, and reduced harvest yields in other parts of Europe, has already had a major impact on the price of grain, while fuel prices also remain very high.
“While retail demand for beef continues to remain strong we have seen this correspond with increased supply. Retail sales are up on the year however this has been driven by promotions and the retailers need to look at ways to re-balance the carcase and ensure producers receive more market share.
“Supply levels have also seen an increase with large numbers of dairy beef and heavier cattle but the supply chain must now give the right signals through a long-term commitment to a sustainable price. This is the only way to give producers the confidence to go forward, go to the expense of finishing cattle this winter, and deliver what the market demands.
“It is timely that the newly formed NFU Beef Group is now working on a new strategy document to highlight solutions to achieve long-term profitability and avoid market volatility. Clearly beef producers in this country have an excellent story to tell and the long-term signals for the future of the industry are encouraging, our product is second to none in terms of quality, its provenance and food safety as well as the many environmental benefits that arise from its extensive production. However the present price situation is unsustainable. We need to address the issue of volatility and price which is currently falling well below the costs of production.”
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