UK and NZ Sheep Industries Talk

June 22, 2007 - The spotlight is shifting on to retailers over who is responsible for the collapsing lamb market in the United Kingdom (UK).

New Zealand (NZ) lamb bosses were in the UK last week to mend fences and discuss the situation after UK producers laid the blame at the door of NZ imports. Those meetings appear to have gone well, with most involved pledging to improve communication and dialogue with their counterparts in a bid to better understand the market dynamics. However, the question of blame is still on the cards, and attention is beginning to shift to the multiples.

Mike Peterson, chairman of Meat & Wool New Zealand, said he believed there had been an element of the retailers playing one off against the other, and expressed his frustration that latest figures showed the retail prices were up, but that had yet to filter back to producers.

Gwyn Howells, chief executive of HCC - Meat Promotion Wales, said the talks had been promising and it was important that there was better dialogue between NZ and the UK. He said that some in the UK had not appreciated the strength of feeling in NZ and the fact they were also facing an unsustainable situation.

However, he said questions need to be asked of the UK multiples.

"The New Zealanders were reacting to market signals from the multiples, which appear to be favouring NZ product for longer periods. Questions need to be asked of the retailers - do they need to have a heavily reliant policy on imported products?"

Peter King, chief livestock advisor for the National Farmers' Union (NFU), said the NFU would be taking the issue up with the retailers.

"We've got meetings over the next four to six weeks and we'll be asking them why they cannot commit to forward contracts for British farmers if they're prepared to do it with NZ. NZ lamb used to be a top-up when British supplies were low, but now the reverse seems to be the case."

King said the meeting showed there was a need for better communication, but he called for "meaningful dialogue."

"There's a feeling from some quarters over here that the fine words mean very little when they get back home," he said, adding that there was a need to build trust between the two.

During the meeting, the NZ delegation was told that the lamb market this spring had been disastrous for British sheep producers with prices significanly down on the previous year.

The NZ representatives also outlines the difficulties faced by their producers and that sheep farmers were moving out of lamb and into dairy due to poor prices.

"Viable returns for NZ and UK producers are in the best interests of slaughterers, processors and retailers. By delivering high quality product, both industries are contributing to growing consumption in the UK, but we also need to return to stable marketing patterns and sustainable prices," said David Raine, National Sheep Association chairman.
Reprinted in part from meatinfo.co.uk, UK

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