19 Sep 2016
NEGATIVE PRESSURE ON CATTLE PRICES TOTALLY UNJUSTIFIEDCattle
IFA National Livestock Chairman Angus Woods has said the ongoing negative pressure from factories on cattle prices is totally unjustified when cattle prices in our main export market in the UK continue to rise strongly.
Angus Woods said that since May 1st Irish cattle prices have fallen by 35c/kg, from €4.10 back to their current base price of €3.75/kg, forcing farmers into a loss-making situation. Over the same period, prices in our main export market in the UK have risen by the equivalent of 54c/kg. UK beef prices are currently £3.64/kg and at the current exchange rate of stg 85.5p/€, this is equivalent to €4.48/kg including VAT”. He said the latest price cuts are totally unjustified and not based on market returns.
Angus Woods pointed out that with average Irish retail price for beef at €8.92/kg, retailers and processors have plenty of margin to pay producers a sustainable beef price in the range of €4.00/kg to €4.50/kg, which Teagasc has stated is necessary for cattle produced off grass and for winter finishers.
Angus Woods said the beef price paid to the farmer is totally transparent and the lack of margin at farm level is there for everybody to see. However, he said there is no transparency on the profits of the major players in the industry or the money taken out of the price chain at each stage. “The failure to regulate the retailers and processors in the food chain is allowing them to drive prices to unsustainable levels. Retailers’ claims about sustainability are meaningless without a sustainable price back to farmers.”
The IFA Livestock Chairman accused the processors of exploiting difficult weather conditions, particularly in the west of Ireland. “We had the same tactics after Brexit, when the processors jumped the gun to turn the screw on prices. The market returns simply do not justify the cuts imposed on producers. Without a decent margin, farmers cannot survive”.