Minister Creed Must Challenge Factories Directly on Price Cuts – IFA
IFA National Livestock Chairman Angus Woods said the meat factories are up to their usual seasonal undermining of the beef price in a very concerted and damaging way.
Angus Woods said at this early stage the Minister for Agriculture Michael Creed should immediately call in the key factory players and challenge them directly over their actions. “The Minister has invested heavily in the beef processing sector in terms of market access over the last two years and made considerable progress. He cannot allow the factories throw all of this work back in his face with constant weekly price cuts that are not justified by market changes.”
Angus Woods said factories are currently paying a base of €4.10/kg for steers and €4.20/kg for heifers, but are quoting less for later in the week. However, demand remains strong with plants anxious for cattle. He said with the good weather farmers are busy and thrive is very good.
In our main export market in the UK, Angus Woods reported that slaughterings continue to tighten and prices continue to rise. For the week ending June 16th, prices rose by another 1.3p/kg with the R3 steer price at £3.80/kg, equivalent to €4.55/kg incl vat. He said the AHDB reported that the continued upward price trend recorded over the past few weeks indicates current market conditions have been in the producer’s favour; the all-prime average has strengthened by 16p/kg in the past four months.
The IFA livestock leader said cattle supplies will remain tight for the next number of weeks and the forecast for the second half of 2018 is very similar to last year. He said the latest figures from the Department of Agriculture AIMS data show that as of April 1st male cattle numbers in the 12 to 24- month age category are down 25,000 head compared to last year, and up 23,000 head in the 24 to 36-month age group.
He said with the kill up over 20,000 head to date this year, a large number of this older group could already be sold. On the female beef cattle side, he said there was an additional 7,000 in the 24 to 36-month age group and an extra 21,000 in the 12 to 24-month age category.
Angus Woods said the recent EU Beef Forecast Group meeting in Brussels is predicting a more positive outlook on beef and have revised their figures to show a contraction in production for 2018 by -0.4% and have also forecasted an increase in consumption by +0.3%. He said this is a positive turnaround for the sector. The EU is forecasting male bovines will increase in price by +1.3% and cow prices will increase by +3.8%.
The IFA Livestock leader said the good news on live exports is very welcome and it was positive to see exporters active in the trade to Libya and also Turkey. He said the potential for the live export trade to move more young bulls and heifers this year looks positive.