Farming Talk: Price the vital factor as lamb demand down

'Consumer demand for meat in EU suffering', was the headline on one of the recent European Market Surveys produced by EBLEX (English Beef & Lamb Executive).

As producers it is easy to concentrate your attention on the costs of production and take the view the animal or whatever you produce must come to this or that price for you to keep producing it.

But does the consumer care if you produce it or not? And if they do, they are not worried about your costs. In a similar simplistic way, producers of lamb are blaming the Eurozone crisis for this year's lower returns, but it is not as simple as that.

While currency changes account for about half of the difference, the fact skins are worth half as much this year as last and that it seems home consumption of lamb fell by as much as 20 per cent in 2011 are also factors, of which the latter is the most disturbing.

For lamb to be looked at again in a fresh light by consumers in the UK it has got to be cheaper, especially against pork, chicken and even beef which is under similar pressure of pricing itself out of the market.

It is a truism that the wealthier countries become, the less they spend as a percentage of their income on food. Fuel costs are a real bugbear to us all.

Consumers are squeezed as they have got to get to work. Producers are squeezed as all forms of agricultural production, even extensive sheep farms, are affected by fuel prices. The cost to get lambs to market, to abattoirs and then the cost of distributing the carcasses, especially if they have to go to Paris, all has to come from somewhere.

Whether the consumer is in France, Germany, Spain or Greece or in the UK, at a time of widespread depression, low industrial growth, high unemployment, the question they ask themselves each and every week is how much do I have to spend on food? Not what would I like? Not let's have this for a change, but simply how much?

All the branding, quality controls and advertising in the world doesn't alter this. In such a climate all producers and suppliers of services have to consider their costs and the efficiency at which they operate above all else. Livestock auctions are no exception to this rule.

John Uffold, Chairman of McCartneys LLP