Farm Ireland

Sunday 18 February 2018

Beef farmers defend €4/kg 'line in sand'

Declan O'Brien

Declan O'Brien

Processors and banks slammed for failing to support finishers

Beef prices steadied this week as farmers, particularly in northern counties refused to take below €4/kg.

Both the ICSA and IFA labelled recent factory attempts to slash prices as "opportunistic" and warned farmers not to sell soft.

Factories were reported to have offered base quotes for steers of €3.90/kg to €4/kg but were forced to pay up to €4.00-4.10/kg to secure stock. Around €4.10 was being paid for heifers.

Henry Burns, the IFA livestock committee chairman, pointed out that cattle numbers remained tight in both Ireland and Britain.

The factory kill to date this year was estimated to be 120,000-130,000hd back on 2011, he said.

The steer kill was back over 26pc or 73,000hd, the heifer kill was down 17pc or 40,000hd and the cow kill was back over 6pc or 12,000hd.

These figures were borne out by the latest data from the Central Statistics Office (CSO) that showed the kill in June down by a staggering 22pc compared to 2011.

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The total cattle kill for June was 106,500hd or 26,625hd per week. This was back over 30,000hd on June 2011 and almost 34,000hd on June 2010.

Mr Burns also pointed out that the continuing improvement in the euro/sterling exchange rate, with the euro now worth 79p, had opened a significant differential between Irish and British beef prices.

Meanwhile, the ongoing troubles in the beef industry could torpedo the ambitious growth targets set out for the sector, the ICSA beef chairman, Edmond Phelan, warned.

He said it would be "pie in the sky" to attempt to realise the Food Harvest 2020 target of growing beef output by 40pc over the next eight years given the attitude of processors.

"We have seen yet again that there is no real commitment by beef processors to a long-term sustainable margin for beef farmers. Instead of partnership, trust is again breaking down. Factories seem to look for every chance to capitalise on any weakness among sellers," Mr Phelan said.

"The meat factories need to provide answers. It is clear that price-cuts in July were not due to oversupply. It is likely that they were just taking advantage of farmers who were in a weak position."

Mr Phelan also took aim at the attitude of some banks, who he claimed were forcing beef farmers to offload stock cheaply because they wouldn't provide credit for their businesses.

"I am very concerned that banks are not walking the walk in terms of supporting farmers, particularly with overdrafts and other temporary loans. There are disturbing reports of overdraft facilities being squeezed," he said.

"Banks have no justification for this, as the farming loan book is one of the best assets in the banks," Mr Phelan added..

"A farmer who has cattle to sell should not have to sell under pressure if it is more advantageous to wait or to feed for a few weeks. Banks need to understand this and to support it."

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