Slump in demand could cost merchants up to €75m but dairy feed sales running 10-15pc up on 2016-17

A €60-75 million drop in beef farmer spending on compound feed has been forecast this year as the collapse in cattle prices ripples out into the wider farm sector.

Sales of beef rations have fallen by 15-20pc so far in 2019. And while the wet weather of the last three weeks has prompted a recovery in feed usage, sales of beef rations are likely to be back by between 250,000 tonnes and 300,000 tonnes.

At €250 per tonne, the fall-off in compound feed usage on beef farms equates to a drop in spending of between €60m and €75m.

In contrast, however, sales of dairy rations continue to grow, with steady milk prices and increased herd sizes being reflected in a 10-15pc lift in usage compared to 2016-17.

Ration sales in 2018 were unusually high because of the drought.

The sharp drop in demand for beef rations has been attributed to significantly lower cattle prices this year.

Since February factory prices for bullocks and heifers have fallen by 30-35c/kg or €100-140/hd which has totally slashed beef farmer returns.

Merchants said the recent factory blockade and continuing difficulties in getting cattle killed over the last three months had also impacted on the trade. In addition, strong grass growth since early spring and reduced feeding levels by finishers had hit demand for compound feed, merchants said.

“I’d say sales were back 15-20pc this summer compared to 2017,” said Pat Ryan of Liffey Mills in Nenagh.

“The trade has picked up over the last few weeks, but it was certainly quieter this year,” he added.

Mr Ryan maintained that the continuing uncertainty regarding Brexit was not helping matters in the beef trade.

Similar sentiments were expressed by other merchants who estimated that sales of beef rations were running around 20pc below normal levels.

Louth-based animal nutritionist, Gerry Giggins, predicted that the reduction in compound feed usage by beef farmers could “get worse” this winter unless cattle prices improved significantly.

Frustration

Traditionally around 1.5m tonnes of compound feed is consumed by beef cattle in Ireland each year.

Meanwhile, ICSA president Edmond Phelan has expressed frustration that the full €100m available under the BEAM scheme will not be delivered.

Mr Phelan said the 5pc reduction in stocking rates specified under the scheme was “a major sticking point” and he called for the full €100m to be paid out by way of higher payment per qualifying animal.

“Moreover, beef farmers who have killed cattle after the May 12 deadline for BEAM have been hit with the full Brexit impact but are entitled to nothing.

“This is not fair and ICSA wants to see a payment to reflect cattle killed at unsustainable prices in the period May 13 to December 31,” he said.

“In addition, we want to see the BEEP scheme continued beyond this year to deliver a more meaningful financial gain for sucker farmers. €40m has been earmarked for this in Budget 2020 and this offers scope for a higher payment per animal.”