Tesco doubles number of Welsh farmers on lamb contracts
23 July 2019
Mark Suddaby, Tesco Director for Meat, Fish, Poultry and Eggs, has told farmers and food and drink suppliers at the Royal Welsh Show that more than a hundred Welsh farmers now provide lamb to the supermarket, as part of its cost of production model.
The contracts provide farmers with a guaranteed selling price, helping to protect producers from the fluctuations in the price of lamb on the open market. Those on the scheme know exactly what they will earn for the lamb they produce until March 2020.
As part of the contracts Tesco also works with its farmers as part of its Sustainable Farming Group for lamb, sharing the latest good practice to improve on-farm efficiency.
The reception at the Royal Welsh Show was held to thank farmers and suppliers who supply the supermarket in Wales. It comes as Tesco celebrates its centenary, and ‘100 years of great value’, in what is also the year of the 100th Royal Welsh Show.
Mark Suddaby said:
“I am delighted that we have seen the number of Welsh farmers on our cost of production lamb contracts double in the past year. The lamb contracts have proved extremely popular and it is great to have so many of our lamb farmers joining us at the Royal Welsh Show.
“It is important to us that we have a genuine and transparent partnership with our suppliers, and our cost of production contracts are just one of the ways we go about that.”
Tesco now has 10 Sustainable Farming Groups, across sectors including milk, cheese, beef, and potatoes. They provide farmers with forums for discussion and ways to drive sustainability, quality and innovation across supply chains, meaning a better deal for farmers, and better produce for customers.
Tesco pioneered its cost of production approach when it set up the Tesco Sustainable Dairy Group in 2007. The scheme ensures farmers are offered a fair price for the milk they produce with the Welsh dairy farmers involved producing all the fresh Tesco-branded milk sold through the supermarket’s stores in Wales.
Tesco is a major buyer of agricultural produce in Wales. A report commissioned by KPMG for the supermarket shows that the supermarket contributes more than £937m a year to the Welsh economy.
Among the farmers who produce lamb for Tesco under contract is Llyr Jones, who has a 1,500-strong flock at his farm at Llanfihangel Corwen in Denbighshire. After previously supplying Tesco with free-range eggs under contract, last year he decided to join the lamb scheme.
He said that knowing the price he was going to get for his lamb in advance had made a real difference to him. Llyr said:
“I know where I am. I can afford to push the lamb a lot more because I know I will get the return, where before I would have been more cautious."
Llyr, who took over the family farm in 2003 said he valued the support Tesco’s agriculture team provide farmers on issues such as animal health, and he had a good business relationship with the supermarket.
“Tesco helps you to get what you want. By helping you they get a better product and I get a better price for the lamb – everybody is aiming for the same goal.”
He would encourage other lamb farmers to consider if the scheme could work for them.
“I would recommend it, it has definitely given me what I wanted this year.”