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Who is Profiting from Lamb in the UK?

08 July 2015
National Farmers Union

UK - As consumers welcome the fall in lamb prices recently, new figures show that while the retail price of lamb is lower in the spring of 2015, compared to the spring of 2014, it has not fallen anywhere near as much as the farmer’s share of that retail price which has dropped from 60 per cent to 50 per cent over the past year.

Lower retail prices are good for consumers, and will help bolster demand for lamb which has been falling year on year.

But consumers are not seeing as much of a drop in price as farmers are, which begs the question – who is profiting from lamb?

The graph below, from AHDB, shows that the share of the retail price of lamb received by the farmer has tracked below the level received in 2014, and well below the returns received in 2013.

Retail prices paid by consumers have also fallen, but not by as much.

NFU livestock board chairman Charles Sercombe said: “The farmgate price of lamb is reaching critically low levels this spring. Farmers know that markets are more volatile than they have ever been, but they will be galled to see that while their share of the retail price is falling, that fall-off is not being fully reflected in the price on the shelves. Everyone in the supply chain needs to make a sustainable margin, but it looks like both ends of this supply chain – farmers and consumers – are getting a raw deal at the moment. It begs the question – who’s profiting from lamb?”

“Farmers need a sustainable price for their product that encourages them to invest in future production, so that British lamb can be on British shelves for the consumer to enjoy in the years ahead. We know that demand for lamb is falling year on year, so I call on retailers to give pride of place to British lamb on their shelves, and to join the industry in promoting this fantastic product during the spring and summer – our peak season when our product is at its best.”

“We also call on the industry to develop risk management tools that can help farmers to deal with the volatile markets that are causing such uncertainty. Farmers need these tools to help them to plan and invest for the long-term.”

“I’ve recently put four key asks at the door of retailers, and this week’s latest figures make those asks more critical than ever. We want a fair deal for farmers, and a fair deal for consumers, so my call to retailers is to act now – and deliver that fair deal.”

The Farmers’ Union of Wales (FUW) also voiced their anger at falling prices.

“Lamb prices have fallen drastically over recent weeks, with prices down by around 20 per cent compared with the same period last year,” said FUW livestock, wool and marts committee chairman Dafydd Roberts.

“Such falls come against a background of predicted falls in net hill and lowland livestock farm incomes of 41 and 24 per cent.”

Mr Roberts said the volumes of imported lamb, which continue to appear on supermarket shelves, added insult to injury for farmers who had seen a fall in liveweight new season lamb prices of around 35p/Kg during June.

“As people struggle to pay bills and face up to the prospect of further falls in CAP support, tempers are beginning to fray and action needs to be taken to restore confidence,” he added.

TheCropSite News Desk

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