19 Nov 2014
IFA WARNS FACTORIES THAT UPWARD CATTLE PRICE MOVEMENTS MUST CONTINUECattle
IFA President Eddie Downey said cattle prices are rising and he warned the factories that the upward movements must continue to fully reflect the strong increase of over 30c/kg in recent months from our main export market in the UK.
Following a meeting of the IFA Executive Council in Dublin this week, Eddie Downey said the tens of thousands of farmers who took part in the IFA protests have made it abundantly clear that they are not prepared accept loss making cattle prices from the factories when market returns are on the increase. He warned the factories that farmers expect prices to continue to rise and fairly reflect increased market returns.
Eddie Downey said the IFA action has shown the strength of farmers and their determination in forcing the factories to move on both prices and specifications. He said the IFA protests have empowered farmers, who are digging in hard and holding out for higher prices. In addition, he said IFA delegations are meeting factories across the country this week pressing the case for prices to continue rising.
IFA National Livestock Chairman Henry Burns said “The grass cattle are gone and factories are finding it desperately hard to get numbers. Farmers know the numbers are very tight and are holding out for 5c to 10c over quoted prices.”
Henry Burns said in general the factory base quote has moved up to €3.80/kg for steers and €3.85/kg for heifers and factories are having to pay €3.85/3.90 base for steers and €3.90/3.95/kg for heifers. He said some plants have moved the base quote up to over €3.90 for both steers and heifers. He said farmers are holding out for €4.00/kg for bulls with factories paying €3.95/kg.
The IFA Livestock leader said “Christmas market demand is now at peak. Factories need the numbers and will have to pay to get the stock.”
Eddie Downey said IFA has made solid progress across the range of specification issues at the Beef Forum including reinstatement of the Quality Payment System, the removal of weight limits and a new Quality Assurance incentive payment for all steers and heifers from Jan 1st 2015.
He said the Quality Payment System has been fully reinstated with a single base price for each factory separately for steers and heifers. This means no dual base pricing on breeds, weights or age. In addition, it was agreed at the Forum that the 12c/kg in spec bonus will be retained.
Eddie Downey said IFA secured the abolition of any weight penalties on all animals to December 31st 2015 with a full review on the impact of weight on the suckler herd in the interim.
IFA has secured agreement with Minister Coveney that the factories will introduce a targeted, cost- neutral price incentive for all steers and heifers from Quality Assured farms from Jan 1st 2015.
It has been agreed that processors and Bord Bia will engage with customers, and DAFM will engage with third country markets with a view to increasing the age specification for premium beef from 30 to 36 months of age.
On farm movements, it was agreed that factories will harmonise the system of counting the four farm residencies for paying the QPS in spec bonus and the Department will make the necessary adjustments to the AIMS system for this purpose. In addition, it was also agreed to secure flexibility on the number of movements and length of residency as well as removing the barriers on sale through the marts and ensuring the QPS bonus.
Eddie Downey said full price transparency right along the beef chain is essential. He said it is now agreed that the current statutory price reporting system based on the R3 price is the accepted system of cattle price comparisons across the EU. It has also been agreed to develop a market index with a view to having more transparency in the chain. It was also agreed that the processors will introduce a transparent remittance document.
Eddie Downey said it was agreed that the processors would operate more contracts for winter finishers and bull beef producers.
The IFA President said it was also agreed that the Department will strengthen controls on the carcase trim in meat plants in accordance with EU Regulations.