French Retailers Relax Grip on Beef Margins
FRANCE - A shortage of French slaughter cattle during the first half of this year led to multiple retailers potentially loosening their stranglehold on retail margins for home-raised beef, writes Peter Crosskey.The FranceAgriMer economic model is that of an integrated breeder and finisher raising cattle primarily on grassland and relies on industry input statistics and index figures.
There is a measurable impact in the rising cost of feedstuffs, but the underlying upward pressure on production costs was generated by buildings and related livestock management.
The FranceAgriMer average boned-out carcase retail price of €6.97/kg last year rose to €7.19/kg during the first half of 2013.
In the process, estimated gross retail margins slipped from €1.67/kg to €1.65/kg. Slaughterers and cutters also took an estimated €0.02/kg hit, too, while the producer’s share of the retail ticket rose to €3.80/kg.
The FranceAgriMer economists also concluded that without subsidies, it would be impossible to cover the cost of the labour and producer capital involved. This is based on generating a national minimum wage for two people.
Since beef and pigmeat are sold through the same retail fixtures, the retailers’ estimates of making an operational loss of just under two per cent on instore butchery counters still applies and was derived from the same survey data.
Once again, it should be noted that an instore butchery counter is not an isolated business unit, but operates within a retail environment surrounded by plenty of high margin categories.
TheCattleSite News Desk