IFA President Joe Healy said the implications of Brexit for Irish farming and the farm income crisis will be the priority items when the Minister for Agriculture Michael Creed addresses the IFA Executive Council for the first time on Tuesday, 19th July.
Joe Healy said the meeting would be used to outline very clearly to Minister Creed the financial pressure farm families are under this year as a result of lower prices, higher costs and reduced direct payments. Joe Healy added that immediate action is required on state aid for low cost credit to all sectors, full draw down of the farm schemes, inclusion of the additional €25m for ANCs and new €25m Sheep scheme in this October’s Budget, 70% payments advance, retail regulation and trade deals.
The IFA President said urgent action is needed by the Government to provide low-cost short–term loans to alleviate cash flow pressures and reduce the high cost of merchant credit, adding that the EU Agriculture Council has already given the go ahead for this state aid in this area.
Beef Forum and cattle prices
Joe Healy said 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 accused meat factories of unnecessarily pulling beef price quotes on the back of the Brexit referendum result, even though they are hedged against currency volatility. Factories are paying prices of €3.95/kg and €4.00/kg this week for steers and €4.05-€4.10/kg for heifers, reflecting the tightness of the market and are 5-10c above what has been quoted.
Joe Healy 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.
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 Angus Woods 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.”
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.