NO ONE in the beef industry should sleepwalk into being ambushed by the realities of decoupled support and its potential to seriously reduce prime cattle supplies, the National Beef Association has warned.

It wants farmers to work out their production costs quickly so they can plan their survival tactics now and construct businesses which can prosper on market income alone.

The NBA also wants all beef buyers, including supermarkets, burger manufacturers, caterers and independents, to accept that, if they do not offer the middlemen in the abattoirs enough to pay feeders a sensible price for finished cattle, home-killed supplies will quickly shrink to disappointing levels.

"Over the next three years the suckler system must slash its costs so it can survive on a market average of somewhere round 250p per dwkg," said Robert Forster, NBA chief executive, "although the immediate target for the dairy bull beef range could be 15p to 35p lower.

"If buyers are serious about their commitment to home-produced beef they will have to play their part in maintaining supplies by raising prices so that slaughterers are able to offer about 250p for standard R4L steers and heifers that meet the UK's demanding standards."

Each side must realise it was impossible for the other, on its own, to make the massive accommodations required by decoupling. Retailers, manufacturers and caterers could not afford beef from cattle killed at 300-320p per dwkg as they would lose too many consumers, but it was equally impossible for farmers to survive on UK market averages of 185p-200p even if they have done everything possible to reduce overheads and introduce longer-term cost saving strategies.

"The NBA would like to see an all-industry agreement to move to the middle ground and accept a compromise in which retailers and farmers each indicate their willingness to make a significant contribution to post-CAP reform stability before the end of the year.

"The sooner cross-industry restructuring begins the better," said Mr Forster. "SFP will be at its highest level when the first payment is made from the end of 2005 and its availability for farmers to use it as a capital fund to convert their businesses so they can survive without direct support will never be greater."

Some strategists thought the pressure on retailers to lift market prices quickly would be reduced because it would take the majority of breeders and finishers three years to work out they were producing at loss.

"This extremely short sighted tactical position must be ditched immediately because farmers who are encouraged to sleepwalk their way to a severe dose of business reality are more likely to cut cattle numbers when they wake up than those who have already worked out the best way to reconstruct their farms and need only the security of continued higher market income to complete the job," said Mr Forster.