The number of Welsh farmers signed up to Tesco’s cost of production lamb contracts has doubled during the past year to more than a hundred.
The contracts provide farmers with a guaranteed selling price, helping to protect them from the fluctuations in the price of lamb on the open market. Farmers also benefited from the sharing of good practice through the retailer’s Sustainable Farming Group for lamb, Tesco said.
The cost of production supply deals had proved “extremely popular”, said Tesco director for meat, fish, poultry and eggs Mark Suddaby. “It’s important to us we have a genuine and transparent partnership with our suppliers, and our cost of production contracts are just one of the ways we go about that,” he added.
The increasing popularity of the contracts came amid tightening global supplies of sheepmeat, said National Sheep Association CEO Phil Stocker.
Booming demand for protein in China following its African Swine Fever outbreak, alongside slowing production in Australia and New Zealand, meant Tesco was working to safeguard its supply of lamb, he added.
“There is a genuine desire from retailers such as Tesco to work closely with producers to build strong integrated supply chains,” Stocker said.
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