Beef finishers' threat to leave sheds empty

Declan O'Brien

Declan O'Brien

Winter beef finishers are threatening to leave sheds empty this year unless meat processors are willing to agree contract price deals with farmers.

Farmers have warned that the continuing surge in feed prices and falling factory quotes for beef had left finishers facing the prospect of significant losses on stock carried over the coming winter.

Record feed prices have resulted in the cost of soya topping €560/t. The costs of other protein sources have also risen sharply on the back of strong demand from China and south-east Asian buyers.

Finisher rations have topped €300/t and the indications are that prices are unlikely to ease over the coming months. During the same period cattle have eased and are now holding at €3.85/kg to €4.00/kg, despite the kill remaining low for the time of year.

The stark choices facing finishers were confirmed at the Irish Grassland Association Beef Conference last week.

Eoghan Finneran of Teagasc Grange told the farmer delegates that they would struggle to make a margin on beef cattle this year because of higher feed costs unless they had access to homegrown grain to supplement high quality silage or beet.

Both the IFA and ICSA insisted this week that the high cost of feed and other inputs meant finishers would leave sheds empty this year if worthwhile contracts weren't forthcoming.

IFA beef chairman Henry Burns said that with the massive increase in feed, fuel and fertiliser prices in 2012, factories would need to offer well-priced contracts to winter finishers this back-end in order to have beef supplies at Christmas and into the New Year.

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Mr Burns said the Department of Agriculture's AIMS data showed that finished cattle supplies would remain very tight this autumn and into the year-end. "Demand is very strong with a serious shortage of beef in Britain and rising prices. In addition, EU production is down and projected to fall further in 2013," Mr Burns said.

"Factories and supermarkets are going to have to produce higher-priced contracts to secure supplies. We have seen the way the grain and feed market has gone."

This view was supported by ICSA beef chairman, Edmond Phelan.

"Escalating ration costs, along with costly and lower quality silage, means that the economics of winter finishing have rarely looked so grim," Mr Phelan said.

"The problem is magnified by recent price cuts at a time when all other key EU beef-producing countries are seeing prices creep up.

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