Farm Ireland
Independent.ie

Monday 21 August 2017

O-grade livestock farms left with €30m black hole

Martin Ryan

Livestock farmers producing O-grade animals are being left with a black hole of more than €30m in their income for this year compared to their British counterparts supplying the same number, weight and grade of stock.

Official figures released within the past week have confirmed that the price, for the year to date, for O-grade cattle in Ireland has slumped to a five-year low, while in Britain producers are being paid the equivalent of €60-65/hd more than they were five years ago.

The statistics also show that the difference between the Irish and British prices for O-grade steers has increased by 340pc since 2008 and producers in Britain are being paid €100- 120/hd more for the same grade of animal.

R4-grade steers have also suffered, with the margin between Irish and British prices increasing by 385pc, but the price difference for U4 steers has narrowed by 9pc.

In 2008 the UK average price for O3-grade steers was 6c/kg more than that which was paid to Irish producers in the same year.

The average difference for this year has increased more than four fold to 26c/kg excluding VAT.

Margin

There is a difference of 32c/kg between the average Irish and average British 2010 price of O4-grade steers compared to a difference of 11c/kg in 2008.


In 2008 the O3 heifer price in Ireland was less than 1c/kg under the British price. In 2010 the margin has widened to 20c/kg. The O4 heifer price difference had increased from 5c/kg in 2008 to 25c/kg this year.

On the basis of the figures to date, the Irish producers of O-grade steers and heifers will be left with a black hole of well in excess of €30m for their supply of O-grade animals to the processors compared to their British counterparts.

Close to 60pc of the Irish beef kill is now being supplied to the British market.

Meat Industry Ireland (MII) stated that for a fair comparison of Irish and UK prices, the different trim and transport cost for Irish beef to the market place had to be taken into account.

An MII spokesman also stated that the comparison should take into account all conformation grades and fat scores.

“This is before additional processing costs in the Republic of Ireland are taken into account. The cost of slaughtering and cutting in Ireland remains significantly higher than in Britain, due mainly to the higher labour and energy costs here,” he added.