Fac­to­ries un­der fire over ‘scan­dalous’ beef prices

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

Irish Independent - Farming - - FRONT PAGE - 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.

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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