Consumers hold the future of the UK beef industry in their hands but so far there has been no attempt at retail level to involve them in industry decisions on how to respond to decoupling, NBA chief executive, Robert Forster has told an international beef science conference at Bristol University.

Explaining that if production costs for mainstream beef were in the region of 260p-340p a carcase kilo, but the market average was 70p-140p less, it was impossible for beef production to survive, he asked whether consumers were being given a chance to indicate how much they were prepared to pay to secure the high provenance domestic product.

"There must be a seriously positive reaction at market level if UK beef production is to continue in the medium term but the slight, 1.2 per cent, rise in the price for slaughter cattle compared with this time last falls well short of covering the loss of the £54 a head slaughter premium and cattle are starting to come through which have missed out on BSP too," Mr Forster said.

"This means that instead of using their SFP to increase efficiency and reduce production costs by the 20-25 per cent necessary for them to stay in business beef farmers are being asked to continue to underwrite costs that would otherwise be met by processors, retailers and consumers."

"And they are doing this by taking money out of their own pockets to make up the yawning chasm between production cost and market income."

However the NBA has spoken to many retailers and formed a strong impression that fresh beef could take an in-store price rise of at least ten per cent without puncturing demand.

While some supermarkets have speculated that beef is such a strong product it could take a 15 per cent price hike and not be seriously damaged.

"In these circumstances consumers must be given a chance to demonstrate how much they are ready to pay for UK beef and show retailers how much it could really sell for," said Mr Forster.

"Now that decoupling is upon us it is impossible to avoid a reconstruction of the retail beef price if meaningful UK beef supplies are to be maintained."

"Current gross margins at supermarket level are only 4-7 per cent and net margins are well below zero which means no one in the beef supply and distribution chain is currently making money."

"So if a sustainable industry is to be built after the removal of direct farm subsidies the multiples are going to have to call a price war truce on beef so they no longer threaten its production and use added value and grocery products that can take a big price hit to jostle each other for new customers instead."