ORGANIC BEEF ISSUES
Friday, February 8
SAINSBURY'S/ABP organic beef producers have expressed alarm at the cost and scarcity of inputs compared with the prices they are receiving.

At a producer group meeting last week, attended by more than 350 farmers, a doubling of the cost of organic feed grain was cited as an extreme example of what they faced, along with the speed at which these negative factors were impacting.

But they also heard the supermarket and processor were looking at the possibility of contracts.

Sainsbury's beef category manager, Rich Squire said the supermarket itself faced problems in retailing UK produced organic beef - firstly because it was not consistently available throughout the year, and also because they were committed to selling only UK produced organic beef. "We are retailing 55 per cent of all organic beef produced in the home market, but our benchmarking policy of checking against our biggest competitor means that we are competing on price against cheaper organic beef which they are importing from South America" he said.

"There is no doubt that these cheap imports are holding back higher prices for organic beef."

ABP managing director Richard Cracknell, said he had total sympathy for the "trauma" producers were facing on input costs across the industry. "These will inevitably force up prices of all categories of beef at the retail point, but producers should remember that this holds a potential danger for consumption with so many alternatives open to the consumer."

"Increased retail prices are overdue. Factors like Argentina probably becoming a net importer of beef is only one extraordinary straw in the wind of change in the international beef market, ignoring the many other factors effecting the global supply chain."

Mr Cracknell said inflationary pressures were rife throughout the industry, and not just on the farm. Some factors may be temporary and this should not be underestimated. "The ban on Brazilian beef could be short lived. Who knows what will happen to the currency movements which are helping exports which are very sensitive to price."

Henry Burgess, new head of pork, lamb and beef buying at Sainsbury's said the company was examining with ABP, the possibility of introducing forward contracts for committed suppliers, and was also taking a fresh look at initiatives to stimulate additional organic production for which there was still additional demand to be satisfied.

By Farmers Guardian


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