Meat factories come out fighting as stand-off looms on beef price gap

Cattle price difference between Ireland and Britain hits €300/hd

MEAT factories have hit back at claims that Irish farmers are not receiving the market value for beef exported to Britain, as a stand-off on cattle price gathers pace across the country.

While Irish base prices have hardened to €3.85/kg for bullocks and €3.90/kg for heifers, factories are struggling to secure supplies this week as bigger finishers hold out for €4/kg.

The differential in finished cattle prices between Britain and Ireland, which stands at over €1/kg or around €300/hd, continues to cause difficulties on the ground for meat factories, with finishers convinced that more can and will be paid for beef.

Buoyant

British beef finishers are securing the equivalent of €5-5.15/kg for beef on the back of buoyant supermarket sales, which have surged by close to 16pc.

Despite the emerging standoff, Meat Industry Ireland (MII) defended the cattle prices being offered by the factories.

MII pointed out that only UK cattle that qualified for the ‘Red Tractor’ beef label were making premium prices in Britain.

The factories also claimed that the lift in British retail beef sales was of limited benefit to Irish factories as just three UK supermarket chains stocked Irish beef.

“There is a supply-demand dynamic in the British market at present that is driving the domestic British cattle price,” said Cormac Healy, MII director.

“British [beef ] production is down 2-3pc below last year’s levels and demand in British retail for domestic ‘Red Tractor’ British beef has driven price there.

“And while retail demand is strong, only three of the top 10 UK retailers stock Irish beef.

“The majority of our beef destined for the UK market goes to foodservice and manufacturing channels, where demand is still significantly curtailed by the ongoing Covid-19 restrictions.

“Not all of our beef goes to the UK; and, of the beef that does, not all of the cuts go into retail.”

MII pointed out that the Department of Agriculture reported price for R4 grade steers last week was 405c/kg compared to 388.5c/kg in the same week last year.

“Current prices are 4pc ahead of this time last year, despite the ongoing serious Covid-19 related challenges in the marketplace, particularly for sales of beef to the restaurant and hospitality sector throughout Europe. Prime cattle price in Ireland has increased by 10c/kg since end-February,” Mr Healy said.

The widening differential between British and Irish beef prices has provoked an angry reaction from the farm organisations.

ICSA president Dermot Kelleher has called for the office of the Food Ombudsman to be ramped up with additional legislation to create an effective regulator for the beef chain.

‘Opaque’

He described beef prices as “opaque” and dismissed MII assertions that farmers received 80pc of the revenue generated from Irish beef sales.

He reiterated that “robust legislation” was required to create a food regulator.

“I am the third ICSA president to be calling for a beef regulator,” he said.

“Our efforts led to the introduction of the Unfair Trading Practices (UTP) directive which, while a step in the right direction, does not go far enough when applied to the beef sector,” Mr Kelleher claimed.

“That is why we need to change from a Food Ombudsman to a regulator.

“We must determine the truth behind who gets what margin from the food chain.”