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Saturday 22 September 2018

IFA: Beef sector needs co-op model on prices

Angus Woods
Angus Woods
Claire Fox

Claire Fox

A radical change in the way meat processors and farmers do business is required to ensure beef finishers receive a sustainable price, IFA Livestock chair Angus Woods has urged.

Mr Woods told the Farming Independent that factories need to look towards the co-op model of price arrangements and contracts which have helped reduce risk in dairy and grain sectors.

"If you look at the dairy industry there are lots of options available. For example in Glanbia you can forward sell a percentage of your milk. Grain growers can also forward sell part of next year's harvest to Glanbia but if you look at beef you can't determine the price next week, not to mind next year," said Mr Woods.

"There has to be an element of risk sharing, if you buy 100 cattle now for finishing next winter, you've to go in to the bank manger asking for money but you've no guarantee of what you are going to get for them. There has to be contracts available for big and small farmers. We can't just look after the big farmer."

At the Joint Committee on Agriculture Oireachtas meeting last week, Agriculture Minister Michael Creed said he cannot control factory prices and that often Irish prices are comparable to other EU prices.

However, Mr Woods said this is "not good enough" and a targeted €200 suckler payment has to be implemented to save the sector. "The Minister saying he can't step in means that he is not even looking at the problem. He has a role in this. He needs to meet the factories because they can't keep squeezing farmers," said Mr Woods. "Major thinking is needed on this. There's serious potential for exporting in to Spain and the government really needs to develop and support this."

Mr Woods added that following a number of weeks of falling prices in the UK, prices have turned and increased strongly for the last two weeks. He said UK steers were making £3.73/kg, which is the equivalent of €4.37/kg including VAT at an exchange rate of 90p/€.

Against this background in our major export market, Irish factories were in a position to stabilise and increase prices and he called on the factories to show some commitment to their suppliers.

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'Cliff edge'

IFA president Joe Healy warned that suckler farming is now on a "cliff edge", due to EU agricultural policy which is asking farmers to produce beef at low prices while reducing direct payments and insisting on ever higher standards.

Meanwhile, the INHFA is calling for the allocation of €120m in the upcoming budget to develop a new 'Sustainable Suckler Cow Payment'. INHFA president Colm O'Donnell said the scheme could provide immediate support to suckler cow farmers by providing payments of up to €3,500.

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