NFU Scotland was written to the UK Government calling for action to deliver better price transparency in the beef supply chain once the Covid-19 outbreak is over.
Strong sales of beef, particularly mince, through retailers and butchers’ shops throughout the pandemic have been hugely encouraging for the red meat sector. However, more traditional joints have been more difficult to sell.
To secure better carcase balance, promotional activities over the Easter weekend have focussed on higher-value cuts such as roasts and steaks.
However, farmgate prices for beef cattle have been falling.
Writing to Secretary of State for Environment, Food and Rural Affairs, George Eustice, NFU Scotland president Andrew McCornick said: “Transparency is one of the conditions required for a free market to be efficient.
“From farm to fork, food prices develop along a food supply chain that involves farmers, the food processing industry and retailers.
While the work of the Grocery Code Adjudicator has delivered a significant amount of oversight between the relationship of processors and retailers, there is little transparency on what determines the price processors pay to farmers.
“The Covid-19 pandemic has changed the marketplace. Foodservice sales have plummeted, and retail sales are strong in parts and are fluctuating in others.”
McCormick said there was “huge frustration” expressed by beef farmers right across the country on what is happening to beef prices.
“This is a direct result of the lack of transparency in the meat industry,” he said.
“While there is transparency on the average price received by farmers, the further the animal goes from the farm gate, the less information is made available on price.
“There is a distinct lack of information on margins in the processing sector or the farmer’s share of the carcase price received.
Unless farmers know how much the beef carcase is selling for, it is impossible for them to determine if they are getting a fair price.
“And part of that discussion must be any value or cost associated with disposing of the fifth quarter – the hide, organs, bones, etc.
“This will undoubtedly have a bearing and the price the farmer gets will be related to the entire beast.
“With the loss of the foodservice sector, the dominance of domestic retail sales and concern with export volumes, the industry needs Government to look at price transparency across the beef supply chain with a key focus on establishing what processors are receiving for the beef carcass and how this is determining the price paid to farmers.
“By doing so, it will ensure more efficient decision-making by all in the chain once we emerge from this crisis. Increasing transparency is also about fairness.
“With all parties knowing what is happening, this will build trust and bring greater clarity on how the food supply chain functions.”
