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Quotes slashed again and weight penalties back on the agenda

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Prime cuts:  With the factories demanding in-spec stock for supermarket cuts of beef, the issue of weight penalties has raised its head again.

Prime cuts: With the factories demanding in-spec stock for supermarket cuts of beef, the issue of weight penalties has raised its head again.

contrastwerkstatt

Prime cuts: With the factories demanding in-spec stock for supermarket cuts of beef, the issue of weight penalties has raised its head again.

The message that has been peddled by supermarkets for years to consumers is of ever-cheaper food. It's a dangerous message.

Last Friday brought home the reality that any society is only one square meal away from anarchy. Food security, not price, is clearly what really matters.

Following the Taoiseach's address to the nation, crowds packed late-night food outlets. Social distancing went out the window. In some instances Gardaí had to be called to keep order.

And all because of fear that food, the most basic of life's necessities, just might run out due to the current crisis.

When this emergency comes to an end, the EU and its national governments need to sit down and have serious conversation on how society supports those on the frontline of food production.

The message has to get through: poor current farm prices are unsustainable if the farming community is to continue to feed the EU's citizens and keep millions of workers employed in the various associated processing and exporting sectors.

In short, we need to see stronger food prices returning more to the primary producer, or those in power need to get real about the CAP budget and food production subsidies .

This week, there have been further factory beef price cuts. Base quotes for bullocks and heifers both drop 10-15c/kg to a universal €3.50/kg as the food industry outside the farm gate protects itself from economic uncertainty.

Quotes for cull cows have also been slashed, with reductions of 20-30c/kg reported as the closure of the fast-food service across Europe bites deep. As of yesterday your R-grade cow was back to €2.90-€3.00/kg, with your coloured O+ on €2.70kg and O- Friesians on €2.60/kg.

When it comes to bulls, U grades are at €3.50/kg, with Rs on €3.40/kg.

In the short term, some cattle going through the system in the early part of the week were probably bought at slightly higher prices, but going forward everything is back 10-20c/kg.

The price is one issue, but with factories concentrating on suitable in-spec supermarket stock, the issue of weight penalties once again rears its head.

One agent was brutally frank, saying: "Weight penalties apply over 420-430kg if you can get a factory to take them."

It's all well and good for Minister Creed to state: "My Department and agencies are implementing business continuity plans to provide the essential services necessary so that producers and processors can continue to operate effectively and keep supply-lines open."

Destroyed

The minister could not have seen how serious this situation would get, but that's of no consolation to those who see their livelihoods being destroyed by collapsing prices.

Following the weekend panic, did the processors see their telephone switchboards light up as supermarkets placed urgent orders for additional supplies? Probably. Therefore in the current climate is in-spec supermarket stock worth more? Also, probably.

On a different note, the resumption of trade with China sees some factories continuing to offer a 10c/kg 'Chinese bonus'. It seems on the face of it a good thing, yet one man I know has a completely different take.

He sees some slick marketing and accountancy on the side of the factories at the expense of producers.

"If you're getting a 10c/kg bonus when your cattle qualify to go to China, isn't the reality that this 10c/kg is just part of your base price dressed up? All in, that's the true base price. So any quoted base that doesn't include that 10c/kg top-up is in effect a discounted price."

This guy would give Sherlock Holmes a run for his money.

Indo Farming