04 Nov 2016
BEEF INDUSTRY MUST INSIST ON PRICE INCREASES FROM UK RETAILERSCattle
IFA President Joe Healy has called on factories to put pressure on UK retailers, insist on higher prices for Irish beef, and pass increases back to farmers.
Joe Healy said, “It is very clear that Irish cattle prices are far below where they should be, based on British prices and the substantial devaluation of Sterling since the June referendum. Farmers are extremely frustrated that they are producing at a loss while price increases from the UK market are both justified and achievable.
“Factories need to recognise that the Irish beef sector is being undermined and put at risk by this market dysfunction. Factories, and all sections of the industry, know there is no future for the Irish beef industry at these prices. They must demand significantly higher prices from their British retailer customers and pass these increases directly back to struggling farmers.
“In a properly functioning market, a retail price increase, passed back down the chain to primary producers, would be the normal economic response to the devaluation of Sterling that has occurred since the Brexit vote. This is exactly what is happening in the case of suppliers such as Unilever and Nestle. Irish beef factories must now follow the example and insist on higher returns.”
The current British retail price of beef is £6.85/kg. If the 14% Sterling devaluation applied, the average retail price would be about £7.80/kg. British cattle prices have risen by 41p/kg or 13% since May, while Irish cattle prices have fallen from a base of €4.10/kg in June (pre-Brexit) to €3.60/kg, a reduction of 12%.
Joe Healy called on Minister Creed to convene an immediate meeting of the Beef Forum and to make it clear to all players that Irish beef farmers cannot be expected to carry the can for Brexit and the Sterling devaluation.
“Factories, Bord Bia and Minister Creed must recognise that Irish farmers cannot take loss making prices for their beef to suit UK retailers. That situation is completely unsustainable, unfair and doing serious damage to our €2.5bn beef sector.
“As we face into the uncertainty of Brexit, it was never more important for our Government and the EU Commission to tackle the excessive power of the retailers. Politicians talk and promise a lot on retail regulation but have delivered nothing to curb abuses by retailers,” Joe Healy said.
IFA Livestock Chairman Angus Woods said, “Frustration and anger among beef farmers is very high at the moment. Severe cuts in beef prices have damaged store and weanling prices and seriously undermined confidence in the sector. IFA representatives are meeting with factories at local level across the country to highlight the rising anger and concern for the future among farmers over loss-making cattle prices.”