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Saturday 20 October 2018

Meat processors hit back at 'profiteering' claims

Angus Woods
Angus Woods

Meat processors have hit back at accusations that factories have engaged in profiteering by slashing cattle prices during the drought.

The farm organisations claimed the meat factories were taking advantage of the ongoing grass shortages and the severe on-farm drought conditions by cutting cattle prices by 10-15c/kg.

But Meat Industry Ireland (MII) rejected these assertions and described the recent criticism as "inaccurate and unwarranted".

Cormac Healy of MII blamed the reduced prices on weaker demand for particular beef cuts and increased beef supplies right across Europe.

"Over recent weeks, we have seen significantly higher cattle numbers coming out than is normal for this time of year. The month of July to-date has seen cattle throughput up over 11pc on the same period last year and 18pc higher than in 2016," Mr Healy said.

"The same trend is evident in many EU member states. Additional cattle are coming onto the market throughout Europe which is experiencing the same drought conditions as Ireland, resulting in more beef than the market can contend with.

"Meat plants are purchasing in more cattle, on average 3,500 head per week more than this time last year, but it is a delicate balancing act at present."

Mr Healy said the pressure of increased supplies from EU producers had been exacerbated by a 16pc lift in beef imports from South America.

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The supply surplus had also resulted in factories being forced to freeze product, which devalues it, he claimed.

Mr Healy pointed out that Irish plants still paid 405-406c/kg for R grade steers and 418c/kg for R grade heifers last week and that these returns were well ahead of prices prevailing in key continental markets.

However, Angus Woods of IFA pointed out cattle prices in Britain, Ireland's main export market, were the equivalent of €4.46/kg including VAT. This is a difference of close to 40c/kg or around €140/hd.

Last week IFA president Joe Healy called on Minister for Agriculture Michael Creed to intervene with the factories to halt the beef price cuts.

He claimed the factories had cut cattle prices unnecessarily over recent weeks and had destabilised the beef market and eroded farmer confidence.

ICSA president Patrick Kent has called for an urgent review of market support measures such as the Aids to Private Storage (APS) scheme for beef.

"Drought conditions are causing a myriad of problems for beef farmers so it is imperative that we look at all possible options to avert a crisis," he said.

"APS could provide a means for getting prime cattle moving through the factories in sufficient numbers in a manner that wouldn't distort the market significantly."

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