Business Farming

Friday 29 August 2014

Coveney calls for beef transparency

Declan O'Brien

Published 09/07/2014 | 02:30

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Agriculture Minister Simon Coveney
Agriculture Minister Simon Coveney

MEAT processors must be more pro-active in relation to the implementation of the recommendations of the Dowling Report on the beef sector and in their dealings with farmers, Agriculture Minister, Simon Coveney, has claimed.

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The minister said that better communication between farmers and processors was essential, given the severity of the current income crisis.

Over the last 12 months, bull beef prices have collapsed, while quoted prices for steers and heifers have fallen by the equivalent of €230-€250/hd.

All underage steers were making 430-435c/kg last year; at the moment, even if they are underage quality assured but are over 420kg, they are cut back to a base of 360c/kg. This means a 450kg steer carcase is making €315 less than last year. Bulls are back by 80c/kg, while cow quotes are down 50-60c/kg on this time last year.

The price cuts have left many beef finishers facing significant losses, and there are also serious fears of a sharp fall in weanling prices this autumn. "Prices have declined significantly since the highs of last year, not only in Ireland, but internationally. That is the market reality. However, in circumstances where there is downward pressure on prices, it is all the more important that the relationship between processors and farmers is built on transparency and trust," Mr Coveney said.

"The Dowling Report made recommendations in relation to the provision of clear, simple and transparent information to farmers on price and specification based on the grid system.

Framework

"It also referred to the need to ensure that any adjustments to specification take adequate account of the normal production cycle and, in relation to the development of contract models, to give farmers more security when it comes to supplying animals. Farmers need to have a simple, comprehensible framework for determining the price that will be paid for their animals," the minister added.

Responding to the minister's statement, a Meat Industry Ireland (MII) spokesman said the industry had already established a working group to seek ways of responding positively to all the recommendations in the Dowling Report, including those in relation to producer/processor communications on market requirements, specifications and pricing structures.

The spokesman said MII would respond to the minister on a range of issues in the near future, but pointed out the lower demand for beef across Europe and that production was forecast to rise this year.

IFA president Eddie Downey said the minister must turn his request to the meat factories into a demand, and insist that processors had an obligation to respond and honour the agreement they entered into with their farmer suppliers on the Quality Payment System or beef grid.

"Factories have treated farmers very unfairly all year, imposing a raft of age, weight and other specification cuts resulting in feeders taking severe losses. Trust is at an all-time low and action is overdue to address livestock farmer concerns," Mr Downey said.

"Minister Coveney must realise and accept that beef farmers are in a very difficult income situation and the severe cuts to beef prices have left the sector in an unviable position going forward. This has to change. Teagasc have made it clear beef farmers need a price of at least €4.00/kg just to cover costs and make a small margin," he added.

Mr Downey said Mr Coveney needed to make real progress in removing the roadblocks impeding the live export trade to Northern Ireland.

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