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Fair price for product

Fair price for product. Sian Davies NFU Dairy Adviser. The NFU champions British farming and provides professional representation and services to its farmer and grower members. Fertiliser price index. Animal feed price index. Motor fuel price index. Combined Beef Rearer/ Finisher.

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Fair price for product

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  1. Fair price for product Sian Davies NFU Dairy Adviser The NFU champions British farming and provides professional representation and services to its farmer and grower members

  2. Fertiliser price index

  3. Animal feed price index

  4. Motor fuel price index

  5. Combined Beef Rearer/ Finisher Sales prices up More calves reared More concentrates used Labour costs up Higher power and machinery costs Producers (per cow costs) AverageTop third Output £822 £846 Total costs £1152 £942 Net margin (09/10) - £330 - £96 (08/09) - £307 - £115

  6. Extensive Beef Finisher Sales prices up Purchase stock costs higher Cattle finished heavier Less concentrates used Feed, forage and fixed costs up Producers (per cow costs) AverageTop third Output £1088 £1020 Total costs £1323 £1036 Net margin(09/10) - £236 - £16 (08/09) - £200 - £49

  7. Intensive Beef Finisher Sales prices higher Higher store purchase prices Less concentrates used/ Lower feed costs Large amount of alternative feeds used Higher power and machinery costs Producers (per cow costs) AverageTop third Output £901 £945 Total costs £954 £881 Net margin (09/10) - £53 £63 (08/09) - £12 £137

  8. Current situation • Costs are even higher (international cereal prices increased sharply /export prices up 70% on Feb 2010). • Margins improved for top producers but mixed results for the average. • Total costs in 2010 up between 3.5 to 4.7%. • Cattle margins under pressure • Global food prices increased for the eighth consecutive month in February.

  9. Food security? Part of Britain’s problem is its increasing reliance on food exports. Britain is less self sufficient now than it was in 1968. Just 58.9% of the food eaten here is produced here.

  10. The future • Impact of higher raw material costs on retail prices. • Impact of stronger commodity prices at farm level. • Higher feed costs are already hitting livestock producers, with significant falls in farm incomes recently forecast by Defra. • Prices of all commodities are rising again (FAO). • Unprecedented levels of offers and discounting by British retailers (39% of all food on promotion). • Impact that rising oil prices will have on all involved in the food supply chain.

  11. Conclusion High commodity prices + Higher cost base + Continued market volatility!! As a supply chain, we all need to recognise these new market dynamics and adapt the way we work. To ignore this puts the viability of our farmers and food producers at risk.

  12. Thank you for listening Sian Davies NFU Dairy Adviser sian.davies@nfu.org.uk

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