Beef sector is facing summer meltdown as prices slump to €3.50/kg
Fears grow that crisis will spread from finishing to store and weanling trade
The difficulties in the beef sector intensified this week as factories pulled prices across the board by 5c/kg or €15-20/hd.
And there are growing fears that losses, which were contained to beef finishers up to this point, could now hit the store and weanling trades as the uncertainty which has gripped the beef sector spreads.
With factory prices for bullocks and heifers back some 40c/kg on this time last year, finishers are facing a hit of up to €150/hd on a 370kg carcass.
Farmers finishing bulls are facing more serious losses, with prices back by as much as €180/hd, while returns for the O4 cull cow are down €65-90/hd on 2018.
The latest quotes from processors show that factories have pulled prices by 5c/kg, with bullocks now on a base of 350c/kg, but 5c/kg more is being paid.
It is a similar story with heifers. Base quotes are on 360c/kg but 365c/kg is being paid. R grade bulls are generally making 340c/kg.
IFA president Joe Healy has called on the EU Commission to stop "sub-standard" beef imports into Europe and make the €1bn support announced as part of the Mercosur deal available immediately for direct aid to farmers.
"With cattle prices on the floor and sterling reaching new lows of 90p to the euro, urgent action is needed to deal with the very severe crisis in the EU beef sector," Mr Healy said.
"Beef prices this week are at €3.60/kg, down 10pc from the same day last year when prices were already appalling."
Commentators have blamed the drop in prices on continued strong cattle supplies, the recent weakening of sterling and a downturn in British beef demand.
The fall-off in beef demand in Britain has resulted in a narrowing of the price gap between Ireland and the UK.
In the past two years, UK prime cattle prices have averaged around €38/100kg above Irish prices.
However, the trade for prime cattle has come under pressure across Britain in recent weeks and the gap has now fallen to around €10/100kg.
Farm leaders in the UK demanded urgent and collaborative action across the whole supply chain to support farmers affected by the ongoing beef price crisis.
Rebecca Oborne, red meat analyst at the AHDB, said Irish and UK cattle prices being this close was unlikely to be sustainable.
"In this current situation for cattle prices, history would suggest one or other price will move to allow the price gap to grow," she said.
Strong declines in the beef trade were also recorded in Spain and Poland in recent weeks, while the trade in France held relatively steady.
Reports have indicated that overall, the EU beef market has been under pressure with good supplies of cattle for slaughter, weaker consumer demand, and competition from other proteins all contributing to the downward pressure on farmgate prices.
Brexit beef fund
Meanwhile, disagreements over the Brexit beef fund have taken a further turn with the IFA now backing the inclusion of dairy farmers in the scheme.
IFA president Joe Healy said it was "ill-judged" that the Minister for Agriculture, Michael Creed, should seek to exclude dairy farmers from the aid package.
"It sets a dangerous precedent and it's a very divisive move by the minister.
"The view of the [IFA]council is that the minister has approached this in a very dogmatic way, without any genuine consultation," he said.
ICMSA president Pat McCormack expressed surprise at what he termed "the enthusiasm" with which some farmers have been turning on other farmers and dismissing their legitimate claims to access the fund.
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