Wednesday 26 November 2014

Viewpoint - Declan O'Brien: Russian offal ban a shock

Declan O'Brien

Published 18/06/2014 | 02:30

IFA President Eddie Downey with beef farmers at the IFA protest in Dublin in March
IFA President Eddie Downey with beef farmers at the IFA protest in Dublin in March

The Russian decision to ban Irish offal imports could not have come at a worse time. That they have also temporarily delisted 12 food processing plants from exporting to the country is a further concern.

With prices already on the floor and cattle numbers still strong, the last thing farmers needed was an excuse for the factories to pull quotes further. And that is exactly what they have done. This week, quoted prices for both heifers and steers were back 5-10c/kg to around 375c/kg for R grades, while bull quotes were cut 5-10c/kg to 340-350c/kg for R grades.

It is still unclear where the difficulties with the Russian authorities actually lie. An industry source suggested that differences in quality specs between the EU and Russia was probably to blame for the difficulties with the processing plants.

He pointed out that plants which were restricted from trading with Russia in the past usually were restored within six to nine months once the problems identified in the audits were sorted out. However, he expressed surprise that the Russians had imposed a blanket ban on offal imports from Ireland and admitted that this move had not been expected.

It is understood that Department of Agriculture officials will be in contact with their Russian counterparts to identify the exact reasons for the Russian ban. Yesterday, both Meat Industry Ireland and the ICSA called on the Minister for Agriculture, Simon Coveney, to resolve the problem as quickly as possible.

Industry sources discounted suggestions that the Russian move was connected to the Ukraine crisis or that it was in some way linked to the imposition of targeted sanctions by the US and EU following Russia's occupation of Crimea.

Hopefully, that view is correct. Figures from Bord Bia show that Irish food and drink exports to Russia in 2013 amounted to €232m. Given the weak state of the Irish economy, the last thing the country needs is to get embroiled in some tit-for-tat trade and diplomacy war.

Meanwhile, Eddie Downey's warning that farmer frustration over the continuing beef price crisis was reaching boiling point and that Minister Coveney was "sleepwalking through this beef crisis" shows the extent of farmer anger on the issue.

It also highlights the extent to which this crisis could have long-term implications for the industry. The IFA president's accusation that the factories had torn up the Quality Payment System since last autumn by using dual pricing would seem to suggest that the days of the beef grid could be numbered.

By the way, in all the talk on the factors hitting the Irish beef price it is interesting that we have heard nothing about the increasing strength of Sterling against the Euro. The pound has gone from 116c to 125c over the last year and has surged in the last five days. Why hasn't this been factored into beef prices and at least some of the windfall returned to farmers given that Britain is our main market?

Indo Farming

Promoted articles

Read More

Promoted articles

Editors Choice

Also in Business