Jay Rayner explains about horse burgers

Quite lovely logic here:

While supermarket bosses insist they have stringent systems in place to guarantee product quality, what they will not discuss is the impact of the brutal deals they enforce upon the companies that manufacture those products for them.

The manufacturers do not want to talk publicly about it either, for fear of enraging their key customers. Privately, however, they regularly report being forced to sell to the supermarkets at break-even or below the cost of production or risk being de-listed. They\’ll do anything to avoid being de-listed because once off the shelves it\’s a massive struggle to get back on. As a result, they\’ll take the deals, and the financial hit, in the hope that the price will pick up in the future. And it\’s when money gets tight that corners are cut.

Low prices, low profit margins, mean horseburgers.

The potential appearance of actual horse meat in burgers is a separate issue and that\’s down to the cost of beef, which has reached historic highs. According to Index Mundi, which tracks commodity prices into the US, the current deadweight price for beef – the whole carcass – has just hit the equivalent of £2.75 a kilo, close to a price doubling in just four years.

It\’s a similar story in this country. According to Eblex, the trade organisation for the beef industry, the key measure for top quality beef prices has gone from just over £2 a kilo in 2006 to £3.77 a kilo last week. As ever, that\’s a function of supply and demand. Most beef animals are fed on grain. In 2008, massive price spikes in the cost of corn and soya presented beef farmers with major cash flow problems. Feeding their animals had just become too expensive. As a result, vast numbers sent not only their prime beef animals, but also their breeding herds, to slaughter.

Five years on and there is a shortage of new beef animals, combined with an uplift in demand for meat from emerging economies.

High prices, high profit margins, means horseburgers.

Thus, err, any prices, any profit margins, means horseburgers.

0 comments on “Jay Rayner explains about horse burgers

  1. “High prices, high profit margins, means horseburgers.”

    Have the input costs for rearing cattle reduced? The 2008 spike in corn prices is visible here but prices returned to that high level later on and have stayed there.

  2. “. . .or below the cost of production…”

    This can’t be a common thing. I mean, unless the manufacturers are providing some other product on which they can make up the loss, they’d go out of business.

    I don’t think any company has enough power to force suicidal deals with its suppliers.

  3. “Most beef animals are fed on grain….” Incorrect. Think grass , and matured grass (sileage and hay) , and sugar beet.

  4. If doing stuff below cost, the supplier is then having to pass that cost on elsewhere. Presumably not doing work solely for one customer so have to wonder about the other customers, some of whom may not have the clout to demand the same treatment.

  5. Farmers are selling meat at cost or below so they can stay on the shelves, selling meat at cost or below?

    Do these writers ever think for a second about what they write on the page?

  6. SadButMadLad – “Most beef are fed on grass. They are fed on grain in the last few months or for diary.”

    Why would cows want to keep a diary? OK, I know what you mean and it is easily done.

    But are you sure? If the beef was Argentinian or Australian or Americans, I might agree with you, but Britain is not known for its vast wide plains of grass. I would not bet your beef has ever stepped foot outside a feed lot in its short life.

    But horse meat? Come on people! Our food adulterators need to look to the East to take lessons in how to properly screw customers:

    http://english.caixin.com/2013-01-18/100484066.html

  7. I have a good mate who raises beef for Morrisons. Talking to him about it, they used to raise traditional breeds very slowly on grass/silage feeds. Since the BSE panic, rule have been in place restricting the amount of meat that can be used from animals over a certain age (30 months IIRC). The practical outworking of this is that cows have to be fed corn to get the weight gain fast enough for them to be a good size by 30 months…

    It’s also worth remembering its been a very poor year for grass fed cows – my mate got half as much silage as the year before (the ground was so wet he couldnt get on with the tractors to get the silage), cows have had to be brought indoors early for winter(they don’t mind the cold, but they don’t cope well in sodden fields), all of which ultimatly reduces supply and thus increases beef prices.

  8. SMFS: feedlots are an American monster, created by the insane US system of corn subsidies.

    In the UK, beef cattle feed on grass (in summer), silage (in winter), and some proportion of grain. Calves produced by the dairy industry, which have a beef father and a dairy mother, need a larger proportion of grain to grow quickly. (I suppose the grain is mostly barley.)

  9. Grain prices high in 2008, eh? What possibly could have caused that? It’s almost as if some of the supply was suddenly diverted to a new demand…

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