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Market Prices Must Mitigate Hike In Production Costs

03 March 2011

WALES, UK - Welsh beef producers say they cannot carry on producing at little or no profit and look to the marketplace to mitigate the huge hikes in their costs in terms of feed, fertiliser and fuel.

Discussions at a recent NFU Cymru Livestock Board centred on the recent Cost of Production Report 2009-10, published earlier this year by HCC, which highlights that the average Welsh beef producer fails to cover production costs. NFU Cymru Livestock Board Chairman Peter Davies was also quick to highlight that costs, notably in fuel, fertiliser and feed had spiralled upwards since the survey was conducted.

Mr Davies said, “It was worrying to read the results of Hybu Cig Cymru’s report, which highlighted that on average the prices beef producers received in 2010 were below those received in 2009, couple this together with the ever escalating cost of the three Fs’- feed, fertiliser and fuel makes the situation even more worrying.

“The industry can not afford a repeat of 2010 where prices fell consistently below the cost of production, only fair and balanced price at the marketplace will help alleviate these price discrepancies and huge hikes in costs.

Alistair Mackintosh, the NFU’s Livestock Board Chairman, also present at the meeting, reiterated Mr Davies’ concerns. He said, “Farmers cannot carry on producing at little or no profit indefinitely, like any business we need to turn a profit.

“In the meantime for our part as a Union we will continue to engage with retailers and processors, using every shred of evidence in terms of increased costs to highlight the huge disparity between the farm-gate price and the cost of production, which will inevitably impact on supply. Clearly, the supply situation is getting tighter, yet there remains a steady demand and coupled with increased costs there is a clear case for price increases.”

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