27 Feb 2014
FARMERS TO PROTEST OVER FACTORY PRICE CUTS AND SPECIFICATION – IFACattle
IFA President Eddie Downey said factory beef price cuts and specifications changes are eroding confidence in the beef sector, especially in winter finishing. He said the move by the factories to hit prime in-spec steers and heifers with new price and weight cuts this week, following their meeting with Agriculture Minister Simon Coveney, was a step too far and shows scant disregard for both the Minister and farmer suppliers.
Announcing details of a beef farmers’ protest at the Department of Agriculture in Dublin next Tues, March 4th, Eddie Downey said farmer anger and frustration with the beef cuts was boiling over and winter finishers cannot endure any more losses. He said, “The time has come for Minister Coveney to stand up for farmers and reject the factories’ tactics. The Minister must insist that stability and confidence are restored to the beef sector”.
Eddie Downey said Minister Coveney must also tackle the lack of competition in the beef sector and take action to close the large price gap between Irish beef prices and those in our main export market in Great Britain. “IFA has worked hard to secure a new ferry route for live cattle to the UK. The Minister must remove the artificial blockages preventing the expansion of the live trade, including the labelling difficulties. This is a market access issue preventing the operation of the EU single market.”
In addition, the IFA President said farmers are concerned that factories are being allowed use the Department of Agriculture AIMS database to monitor livestock numbers on individual farmers. We want a guarantee from the Minister that the AIMS system is absolutely confidential and factories do not have access to the herd profile of individual farmers.
Eddie Downey said the collapse in bull beef prices since last December has inflicted severe losses on winter finishers and seriously eroded confidence and morale across the beef sector. Some bull beef finishers are taking a financial hit of €200 to €300 per head and struggling to get cattle killed before more severe price and spec cuts are applied. He said income losses at finishing level will also impact on store and weanling producers.
The IFA President said the factories and their supermarket clients cannot change the goalposts with new specifications in the middle of the production season. He said farmers calving cows or buying cattle this Spring are at a loss as to the direction they should take.
IFA National Livestock Chairman Henry Burns said the latest round of factory cuts and limits on in-spec cattle was avoidable as our main markets in the UK and across Europe show signs of stability. In the UK, EBLEX are reporting ‘an uplift in live weight prices and firmer consumer demand’. The price of R4L steers in Great Britain is £3.75/kg, equivalent to €4.74/kg incl vat. “With such a large gap between Irish and GB prices, the factories cannot justify a price cut on prime in-spec steers and heifers.”
Henry Burns said despite the fact that the weekly kill at the factories is only 31,500, farmers cannot get their cattle killed and many are being pushed back week after week into over age and overweight price cuts.
He said there are serious implications for the beef sector and the targets set down in Food Harvest 2020, if the problems in the beef market are not addressed and prices stabilised quickly. He said the suckler herd is under severe pressure and the price cuts and specification limits will untimately hit weanling and store prices, compound this situation.
The IFA Livestock Leader said the recent market developments have left farmers very sceptical about the expansion plans on beef. “The minute the beef kill goes over 30,000 head per week, the price seems to hit the deck. Farmers believe a strong live export trade for Friesian calves to Spain and Holland, weanlings to Continental EU markets and stores to North Africa are essential to keep a competitive balance in the trade.”