New Data on Beef Consumption and Retail Price Exposes Processors on Cattle Price Gap – IFA

New data on beef consumption and retail prices in the UK and Ireland compiled by IFA shows that there is no justification for the meat factories to continue to withhold higher market returns to beef farmers.
IFA President Eddie Downey said the figures illustrate very starkly that our main market in the UK performed strongly on both volume sales and retail price in recent months, which coincided with the 30c/kg increase in UK cattle prices and the widening of the gap between here and the UK to €350 per head.

“For the 12 weeks to the middle of September, the volume of beef sales in the UK was up 4.1%. During the same time period, price rose by 3.3%. Given the large scale of exports to the UK market from here, the processors cannot justify their refusal to pass back increased market prices to Irish farmers.”
Speaking at the ABP plant in Cahir, Co Tipperary as the 48-hour nationwide protest entered its second phase, Eddie Downey said the figures raise serious questions about the margins that operate in the food supply chain outside the farmgate. “The price we are getting has been cut, yet consumers in our main market are paying more. Clearly, this situation is being exploited by processors and retailers at the expense of consumers and primary producers.”

Mr Downey said a key element of addressing the beef price question must be full transparency and independent verification of wholesale and retail prices so that is it clear to everyone who gets what in the food chain. The Bord Bia facts on beef prices are based on the European statutory requirement of price reporting and, coupled with the most recent retail figures, show clearly that there is justification for an increase to producers.

An examination of Irish retail beef prices in the 12 months to August 2014 shows that there is no link between the fall in farm gate prices and the price consumers pay. CSO data reveals that there was a small drop in steak prices of 2%, while other beef products, including diced beef (+6%) and roast beef (+1%) increased in price. Teagasc has confirmed that livestock farm incomes are down 13% to 22% last year, ranging from €9,469 to €15,595. Eddie Downey said the growing divergence between the incomes of beef farmers on the one hand, and the prices that consumers are paying on the other, is evidence of the collusion between processors and retailers to cream off excessive margins for themselves.

Eddie Downey said farmers are very determined that beef prices at the factories must rise to fairly reflect the very strong increase in UK cattle prices, where Irish beef sales are up 20% this year. Current prices in Britain for R grade steers are running at the equivalent of €4.70/kg incl vat, which is almost €1/kg higher than the €3.73/kg Irish price.

Mr Downey said IFA had engaged fully with the Beef Forum process. He said he was confident, based on intensive discussions last week that agreement could be reached on a wide range of issues at the Minister’s Beef Forum next Wednesday. “After over eight hours of discussions under the chairmanship of Michael Dowling with the meat factories on Friday last progress was made on a range of our concerns regarding specifications, but the issue of market price returns is separate.”

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