Farm Ireland

Tuesday 20 March 2018

Beef price gap with Britain now €250/hd

Farm leaders demand transparent price index across all EU member states

Angus Woods
Angus Woods
Louise Hogan

Louise Hogan

The IFA has slammed the massive differential between Irish and British beef prices which, it claims, has ballooned to almost €250/hd.

The IFA livestock chairman, Angus Woods, pointed out that British prices of €4.48/kg (including VAT) were at least 70c/kg above Irish returns or almost €250 per head on a finished animal.

He described the recent cuts in factory prices as completely unjustified given the strength of demand in British and continental markets. "Across our main Continental EU beef markets, cattle prices are up 30c/kg since this time last year, with very strong demand for manufacturing beef evident in stronger cull cow prices.

"In Britain, our largest export market, cattle prices are £3.78/kg, equivalent to €4.48/kg including VAT," Mr Woods maintained.

The IFA representative claimed there was no market basis for recent beef price pressure and he blamed "factory opportunism" for eroding beef farmer confidence and compounding an already difficult income year for finishers.

Mr Woods said steer prices this week ranged from €3.75-3.80/kg in the beef plants, while heifer prices were €3.80-3.90/kg, despite factories quoting less.

With weekly kills holding above 37,000 head, a noticeable reduction in fat cattle numbers has been reported in the marts.

Jim Bushe of New Ross Mart said there were fewer heavy cattle on offer in recent weeks, and he predicted that cattle supplies could "tighten up fairly quickly".

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Beef finishers claimed that factories have been forced to "travel" outside their usual catchment areas to get stock.

The weaker tone to the factory trade has not been reflected in steer prices in the marts. Bullock prices were generally steady last week, the Ringside data confirmed.

However, the trade for fat heifers was back €20/hd on average last week, with prices down €70/hd over the last month.

In contrast, demand for cows has held, with factories which specialise in manufacturing beef paying €3.45/kg for R grades, €3.30-3.20/kg for O grades, and decent P-grade animals making from €3/kg to €3.15/kg.

Price chain

Meanwhile, Mr Woods said the factories attempts to slash beef prices highlighted the continuing "vacuum on transparency" in the beef price chain.

"IFA recently discussed this flaw in the beef price market with Minister Creed who accepted that there is a need for greater price transparency. IFA has called on the minister to develop a price index that accurately reflects market returns," he said.

ICSA president Patrick Kent said that the food chain needed to be much more transparent if farmers were to have any chance of making a viable return in most farm enterprises.

"The EU must tackle the inherent lack of balance in the food chain. Farmers spend three years producing beef cattle, processors spend three week getting it to the shelf and it takes the retailers three days to sell it, yet farmers are the only ones not making a profit.

"What is needed is compulsory audits of the food chain at EU level to see what margins are being made at processor and retailer level on key farm commodities such as meat, bread and dairy.

"We have very clear transparency around average farm margins but have very little information on what margins are being made by processors and retailers," added Mr Kent.

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