Bob Kennard, director of the group, said: “Supermarket processors have been talking about forward pricing of organic livestock after New Year. This is a major step forward in potentially giving confidence to the sector.
“However, there is also a danger it will institutionalise low prices if the processors intend to offer fixed contract prices below recent historical prices. A guaranteed minimum is fine, as is a sensible fixed price - if it ensures producers receive a sustainable and fair price.
“However, the worst scenario is a fixed contract at prices below a five-year average. This can only tell the producer that the supermarkets are intending to reduce prices to them.”
Nigel Elgar another director, added: “Demand for UK organic beef and lamb is increasing. But there need not be shortages if production is spread through the season by sensible pricing.”