The supermarkets must realise that the resumption of beef exports has torn up the rule books for pricing, the National Beef Association has warned.
It claims that supermarkets have been trying to dampen down steadily ­rising prime cattle prices instead of accommodating the higher costs faced by their processor suppliers.
With the resumption of exports, British prices are under upward pressure because wholesale prices on the Continent are higher.
EU markets are also ­witnessing high demand for all types of beef.
The NBA said the multiples had had temporary ­success in holding down market averages. But chief executive Robert Forster said: "This is a tactic that will backfire on them. If the supermarkets do not accept that the only way they can maintain supplies of UK beef is to pay enough to keep it here they will lose it to higher-paying buyers across the Channel."
According to the NBA, the multiples can develop long-term supply security for UK beef only if they send out encouraging price signals that will persuade breeders to put cows in calf instead of pushing them into manufacturing beef market.
"Processors, some of whom already face severe cashflow problems, are ­desperate to create a price plateau because it is the only way they can break the chain of continually paying more for cattle than they are recovering from customers whose retrospective ­payments constantly trail price increases when the market is on the rise," said Forster. "However even slaughterers caught in a supermarket armlock will not be able to hold down prices for long.
"This will intensify the struggle between them and their customers that will either result in the multiples accepting that UK cattle prices are moving on to a permanently higher, post-export price plane, or force more processors to create some financial breathing space for themselves.
"They& 'll do that by seeking out export customers that are prepared to pay more for their beef."
Kit Davies
Acting Fresh Foods Editor

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