Widening Gap with Export Benchmark Beef Price not Acceptable
IFA Livestock Chairman Brendan Golden has hit out at the opportunism of factories in reducing beef prices when the Export Benchmark Price compiled by Bord Bia shows market conditions to be steady.
He said the continual price pressure exerted by factories over the past number of weeks has now dropped our price to 28c/kg below the benchmark price.
“The behaviour of factories is very irresponsible and opportunistic, given the challenges beef farmers face. Factories and indeed retailers are acutely aware of the production costs on farms which have again been verified by the most recent Teagasc Situation and Outlook report,” he said.
The report shows input costs increasing by 29% and FFI decreasing by €20/ha as a result of market failure to return these increased costs.
He said there is capacity in the market place for higher beef prices and factories must close the gap with the Bord Bia Prime Export Benchmark price.
Looking at the medium term, the IFA Livestock Chairman said factories must provide minimum price guarantees for winter finishers.
“Throughout this year, IFA highlighted the need directly to the factories to provide winter finishers with some certainty as investments are made in feeding cattle for the most expensive period of the year.”
He said finishing cattle over the winter months will cost on average €6/kg based on Teagasc costings. This equates to €2,400 investment in a 400kg carcase. Beef finishers do not have the capacity to take on this level of risk without a minimum price guarantee from the market place.
“Farmers who are considering finishing cattle over the winter into next spring should demand price guarantees before committing to the level of investment required.”
Brendan Golden said beef farmers have been left very frustrated at the failure of the Minister for Agriculture Charlie McConalogue to put meaningful supports in place for winter finishers.
IFA has consistently called for the provision of a rearing and finishing payment of €100/head for beef farmers. The Minister refused to include such a scheme in the CAP Strategic Plan, has not provided for one in the Budget and is effectively leaving beef farmers to fend for themselves as we face into our most expensive production period.
He recognised the advance payment announced for next year’s fodder scheme, but beef farmers need immediate direct support for the cost of meal and other inputs associated with this finishing period.
Brendan Golden has again called on the Minister to come forward with supports for farmers feeding animals over the winter months to offset the unprecedented costs we are faced with in order to maintain our production systems.