Farm Ireland

Friday 23 February 2018

MII standing firm on beef price grid

Processors defend new system but farm groups seek changes

Caitriona Murphy

Caitriona Murphy

Meat Industry Ireland (MII) has dismissed calls for the new beef price grid to be suspended.

The pricing structure has been slammed by the ICMSA and ICSA, with the dairy farmer organisation calling for it to be set aside pending further consultation.

But MII director Cormac Healy said moving away from the grid would be a mistake.

"Change is always difficult and it needs time for people to get used to the new system," Mr Healy admitted. "This system is what people have been calling for.

"In the past, the industry was criticised for not giving clear market signals and rewarding quality," Mr Healy explained.

"With this system, that is exactly what we are doing -- telling the farmer what the customers are looking for, as well as putting beef quality assurance on a firm footing."

Mr Healy was adamant that the beef price grid had been well thought out, based on science and Teagasc research.

"We are only four weeks into the new system. It's going very well so far and farmers need more time to get used to it," the MII director said.

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However, ICSA beef chairman Sean Scully said there is a huge amount of anger among farmers that no reasonable effort has been made by factories to improve prices to a level that will even cover costs.

"The efforts of the beef forum have been a complete waste of time, consultation has been limited and the outcome is that U-grade cattle have seen no worthwhile increase, but there are penalties for lower-grade cattle, 4+ fat grades and over 30 month cattle," Mr Scully claimed.

The ICSA has embarked on a national campaign urging its members to hold back stock from the factories because of the new price grid.

"I am reiterating my call for farmers to hold back cattle until we see a significant rise in price. Farmers need a base price of at least €3.36/kg, if there is to be a future for beef production and the suckler herd," Mr Scully said.

Meanwhile, the ICMSA has suggested that the new grid be run parallel with the normal price system for up to a year so that farmers would be able to judge its impact.

"Farmers need to be able to make an objective comparison and ICMSA is not prepared to tolerate a system -- much less support it -- in the absence of independent and verifiable data," said ICMSA president Jackie Cahill.

"We are certainly being contacted by farmers from all over the country who are most unhappy with the prices decided through the new grid," said Mr Cahill.

"Most criticism is being directed at the fact that there is no verifiable reason being given to the farmer that justifies the very substantial gap between the top and the bottom of the grid," he continued. "In these confused circumstances, we feel that the grid should now be set aside for payment purposes until there is further consultation."

Mr Cahill warned that the grid would become even more discriminatory when animals grading fat class 4= would suffer a price cut next month. The current concession for over-fat stock in certain grades is worth some 6c/kg or €21/hd.

It is understood that Kepak, Dawn and AIBP plants are all buying cattle based on the price grid, while there is a mixed reaction from other plants. Kildare Chilling appears to be buying half its stock based on the grid and half off-grid, while Moyvalley Meats and Liffey Meats are operating a similar policy.

However several smaller and independent plants are ignoring the grid completely and buying cattle on a flat rate basis.

IFA livestock chairman Michael Doran said the biggest challenge would be for farmers not to sell under-finished and over-fat stock.

"The incentive is there for farmers to be paid for meeting market specifications," he said.

Irish Independent