Wholesale beef prices fall too far

  • 2004-08-26
  • From wire reports
RIGA - The wholesale price of beef has fallen alarmingly fast in Latvia - 0.05 - 0.06 euro per kilogram since late July - leading many cattle farmers to sound alarm signals among government officials.

According to the Latvian Beef Producers Association, the purchase price of beef has fallen as much as 0.15 euro in some provinces, while at the same time price in stores remained high.
Association Deputy Chairman Agris Veide said that cattle farmers were puzzled by the trend, especially considering the comparatively low price of beef in the country.
"There is currently confusion about the low prices set by meat companies, as there has always been a deficit for good quality beef. Logically the price should be high," he said, adding that imported beef was the only explanation for the current price fall.
Meat processing companies, however, saw the situation differently, claiming that the price was rising again.
"Our price is 0.95 lats (1.41 euros) plus VAT, and that's a good price," said MVA director general Vladimirs Mikhajevs.
Other processors also denied the expectation of a long-term drop in prices.
According to reports from the Latvian market promotion center, beef prices normally drop slightly at this time of the year.
At the same time only 15 percent of the beef consumed in Latvia is locally produced, with the rest imported from Poland and Lithuania.
Maxima, the Lithuanian retailer with a large market share in Latvia, has reportedly become one of the largest importers of beef into the country.
The Latvian Agricultural Organization Cooperation Council met on Aug. 18 to discuss beef procurement prices, which the Agriculture Ministry has calculated as being the lowest in the EU.
Earlier this summer, farmers threatened to strike if the government did not intervene, claiming that it's not common practice for meat companies to buy more expensive imported beef.