The price of beef since Christmas is unsustainable in the long term, Richard Cracknell, managing director of ABP, warned livestock producers at a meeting of the ABP-Sainsbury’s Partnership Group at Oswestry.
“I would love to see the 250p/kg dw some people keep calling for, but we live in the real world in which supply and demand decides everything,” he said. “There is a thirst for cattle, and prices will rise, but much more slowly than some people hope.
“Farmers need not fear the return of OTM beef to the market. There may be a short-term fall in prices when it comes back on to the market - but as this beef is desperately needed to replace imports in the food sector and in manufacturing, the market will quickly stabilise. The good news for farmers is that cow values will double.”
Cracknell said that while countries such as Brazil had an almost unlimited ability to expand production, the logistics of supplying such beef into a sophisticated consumer market like the UK were difficult and it did not pose a threat to home production.
“We detect no desire in the major multiples to reduce their dependence on UK and Irish beef.”