Farm Ireland

Saturday 24 February 2018

Contract doubts rise as AIBP keeps silent

Martin Ryan

Few, if any, of the much-lauded beef finisher contracts have emerged since AIBP's announcement last month.

The IFA's Michael Doran says he has not heard of a single farmer that has entered into a winter finisher contract along the lines of what was announced two weeks ago.

While discussions are ongoing, doubts are now growing over the availability of the offer to guarantee a base price after December for the majority of farmers.

These fears will be strengthened by the refusal of an AIBP spokesperson to either confirm or deny if contracts are available to producers.

"We are not commenting," he said about the contracts, while on the issue of forward prices, he replied: "That is a matter between the company and finishers."

The silence surrounding AIBP on deals for production of beef on contract has led to a lot of confusion among finishers.

It is understood that contracts have been offered by the company to selected large producers, with a guaranteed minimum of 330c/kg for steers from December 1 and up to eight cents/kg more for heifers.

However, several producers from different regions of the country have reported that they have been informed at AIBP factories that "contracts are not available".

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Finishers who spoke to the Farming Independent are reluctant to go public for fear of damaging their relationship with the local factory.

"I know that some large finishers have been offered contracts, but they appear to be available only to the select few," one producer said.

"Smaller producers are unlikely to be included and they'll be offered the spot price when the time comes, unless cattle are very scarce and demand drives the price."

Livestock farmers are being advised by the IFA that the contractual production of beef for spring 2011 at 330c/kg is not viable.

Mr Doran, chairman of the IFA national livestock committee, said "feeders need a minimum guaranteed base price of 350c/kg because they cannot go through another year of losses".

Mr Doran said that he will be minimising the number of cattle he will finish over the winter, preferring instead to finish them off grass next summer.

However, he said that the IFA is still working to secure a viable minimum base price from the factories for winter finishers, and "factories and retailers will have to step up to the mark on price".

Irish Independent