fair price for product

The NFU champions British farming and provides professional representation and services to its farmer and grower members

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

The NFU champions British farming and provides professional representation and services to its farmer and grower members

Fertiliser price index

The NFU champions British farming and provides professional representation and services to its farmer and grower members

Animal feed price index

The NFU champions British farming and provides professional representation and services to its farmer and grower members

Motor fuel price index

The NFU champions British farming and provides professional representation and services to its farmer and grower members

Sales prices upMore calves reared

More concentrates usedLabour costs up

Higher power and machinery costs

Producers (per cow costs) Average Top third

Output £822 £846 Total costs £1152 £942Net margin (09/10) - £330 - £96

(08/09) - £307 - £115

Combined Beef Rearer/ Finisher

The NFU champions British farming and provides professional representation and services to its farmer and grower members

Sales prices upPurchase stock costs higher

Cattle finished heavierLess concentrates used

Feed, forage and fixed costs up

Producers (per cow costs) Average Top third

Output £1088 £1020 Total costs £1323 £1036Net margin(09/10) - £236 - £16

(08/09) - £200 - £49

Extensive Beef Finisher

The NFU champions British farming and provides professional representation and services to its farmer and grower members

Sales prices higherHigher store purchase prices

Less concentrates used/ Lower feed costsLarge amount of alternative feeds used

Higher power and machinery costs

Producers (per cow costs) Average Top third

Output £901 £945 Total costs £954 £881Net margin (09/10) - £53 £63

(08/09) - £12 £137

Intensive Beef Finisher

The NFU champions British farming and provides professional representation and services to its farmer and grower members

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.

The NFU champions British farming and provides professional representation and services to its farmer and grower members

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.

The NFU champions British farming and provides professional representation and services to its farmer and grower members

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.

The NFU champions British farming and provides professional representation and services to its farmer and grower members

ConclusionHigh 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.

The NFU champions British farming and provides professional representation and services to its farmer and grower members

Thank you for listening

Sian Davies

NFU Dairy Adviser

sian.davies@nfu.org.uk