Factory Returns Failing to Reflect Robust Uk Market Conditions – IFA
Speaking in Teagasc Grange today at the BEEF 2016 Open Day, IFA Livestock Chairman Angus Woods accused meat factories of unnecessarily pulling beef price quotes on the back of the referendum result, even though they are hedged against currency volatility.
He said demand for beef from UK supermarkets is particularly strong, with prices rising a further 2p/kg in the past week as numbers of finished prime cattle remain tight in the UK. The weekly kill here dropped, with a significant reduction in heifer and cow numbers, reflecting the tight supply/demand reality on the ground.
Angus Woods said based on these figures, farmers should strongly resist the factories’ price cuts, which are unjustified. “Rather than attempt to exploit the post-referendum situation, they have a responsibility to reflect the strong market conditions in the UK and maximise the return to producers.”
The IFA Livestock Chairman warned against using the referendum result as a lever on price, saying market access for Irish beef is unchanged and demand for product continues to strengthen, while beef exporters would have been hedged against currency movements. “Using market access as an excuse to lower prices is opportunistic and does not reflect the reality of what is available from the UK market place.”
“The UK market is heavily dependent on supplies of Irish beef to meet consumer demand. It is vital that our processors take full advantage of the strong market conditions to protect farmers. The current markets conditions in the UK, driven by tight supplies and strengthening prices, put our beef processors in a strong negotiating position to protect returns to farmers.”
The Beef Forum, which will meet in the next fortnight, must provide clear direction and certainty for beef farmers in relation to our most important export market, both in the short term and the long term.
He said while the UK is an important market for Irish beef, half of our exports go to other European and international markets, which are not directly, impacted by these events a fact our factories chose to ignore in their price cut campaign.