Farm Ireland
Independent.ie

Thursday 8 December 2016

Slaughter cattle shortage 'set to become more acute'

Published 17/05/2011 | 05:00

The shortage of cattle for slaughter that is currently driving beef prices higher is set to become even more acute in the coming months, the ICSA has predicted.

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Factory slaughter numbers for the first week of May were just at 20,064, compared with 23,224 for the same week last year.

The figures represent a 13.6pc drop in slaughtering of prime cattle for this week, while the year-to-date figures show that the prime kill is down by only 6.7pc.

ICSA general secretary Eddie Punch said the figures demonstrate that the cattle scarcity is becoming more acute with each passing week.

Late last year, Mr Punch predicted that reduced cattle supplies would drive beef prices up to 400c/kg, a prophecy that has recently been fulfilled.

However, the ICSA man declined to set a new target for beef prices, saying it was early to look ahead.

Reality

"What is happening now just reflects the reality that scarcity of supply is the essential ingredient to better prices, and it certainly demonstrates that any return to old style production-linked CAP payments would be a disaster for farmers," he said.

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"But the figures do show that scarcity will also be a big factor in 2012, based on exceptionally high live exports in 2010. This should help maintain good prices in 2012," he added.

Mr Punch said the likelihood was that cattle would become even more scarce as the summer progressed.

"I believe that supplies for the spring held up better than expected as farmers marketed cattle at an earlier stage rather than buying expensive meals," he said.

"We've also seen a significant swing to bull beef, with young bull slaughter up 31.5pc in the first quarter of 2011, which is bringing forward the average slaughter age."

He warned that this year's major fall in live exports (down 37pc on last year) would eventually bring cattle supplies back up in late 2012 and into 2013.

The vagaries of the sterling/ euro exchange rate could also affect prices, he warned.

"In the medium term, we can only hope that the exchange rate goes in the right direction and that Ireland reduces its dependence on Britain for beef exports," he said. "This remains the most uncertain factor in predicting beef price."

Meanwhile, ICMSA beef chairman Kevin Connolly said farmers could now dictate the terms on which their cattle are sold, and their position is likely to be strengthened in the weeks ahead, given the level of cattle supplies.

He advised any farmer who is unhappy with the grid system of payment to insist that his/her cattle were purchased on their terms rather than those of the factory.

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