Farm Ireland
Independent.ie

Friday 14 December 2018

Factories under fire over 'scandalous' beef prices

IFA claims farmers are 'being shafted' as gap between Irish and British prices widens to €250/hd

Nenagh Mart. Mart Drovers Colin England and Eamon Scully .Picture; Gerry Mooney
Nenagh Mart. Mart Drovers Colin England and Eamon Scully .Picture; Gerry Mooney
Angus Woods

Catherine Hurley and Martin Coughlan

Beef factories and the IFA are on a collision course after processors have again moved to cut prices ahead of what they predict will be a very difficult autumn and winter for the sector.

Efforts by the factories to cut beef prices by a further 5c/kg this week to 370c/kg for steers and 380c/kg for heifers have prompted a furious reaction from the IFA.

"It is a scandal the way the meat factories have systematically cut cattle prices here, forcing prices down well below the cost of production and inflicting severe losses on farmer suppliers," claimed IFA livestock chairman Angus Woods.

Industry sources said the factory cuts were not being pushed in a stringent manner, and most cattle were still being bought at last week's quotes of 375c/kg and 385c/kg for steers and heifers respectively.

But with last week's kill holding at over 38,000hd, finishers predict that the total kill could breach the 40,000hd threshold over the coming weeks which would ease the way for further price cuts. Since mid-August the factories have pulled quotes by 20c/kg or the equivalent of €70-80/hd.

Mr Woods pointed out that during the same period British steer prices have risen to the equivalent of €4.47/kg (£3.80/kg) which equates to a differential of €250/hd between Irish and British steer prices.

"Livestock farmers feel they are being shafted and are not prepared to take it any longer," Mr Woods said.

However, Kepak CEO Sean Coffey told a Dairygold meeting in Cork that Europe was awash with beef because of the fodder crisis and weather conditions.

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These factors are driving a lot of extra product onto the market, he said. The Kepak boss forecast a very difficult back end to the year for the beef industry, with prices remaining under serious pressure.

"There are lots of cattle there to be processed and that can only have one effect," Mr Coffey said.

However, he insisted that Kepak would pay a premium to farmers if they delivered the "right cattle, on spec, on time".

Mr Coffey stopped short of giving a guarantee on price, but said Kepak would have a "guaranteed structure" for any premium paid.

Shortage

When asked by farmers if the current beef price was sustainable from a farmer perspective, Mr Coffey conceded that it was not.

On a positive note, Mr Coffey predicted that cattle supplies would tighten again in the spring.

"We see a shortage [of cattle] next spring… and there is only one way to get farmers to have cattle for spring and that's to pay them the right price," he said.

Mr Coffey refused to divulge Kepak's margins following a call from the floor for greater transparency in returns in the beef industry.

Meanwhile, speaking on the Farming Independent stand at last week's Ploughing Championships, IFA president Joe Healy contrasted the actions of the dairy and beef processors during the recent drought and fodder troubles this spring and summer.

At a time when the dairy processors had sourced fodder, as well as introducing schemes to assist farmers with bill payments, the beef factories' idea of help had been to drop payments for cattle by €70-80/hd, Mr Healy said.

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