30 May 2012
IFA MEET FACTORIES ON LAMB PRICESSheep
IFA President John Bryan and National Sheep Committee Chairman James Murphy met the lamb factories earlier this week and made it very clear that lamb prices must be stabilised to halt the severe losses at farm level. John Bryan said the downward spiral that has knocked lamb prices by €25 below last year’s levels must be stopped and stability restored to the market.
John Bryan told the factories the severe price cuts had seriously damaged farm incomes and eroded confidence in the sheep sector. “Early lamb producers have seen their profit wiped out through major price cuts and costs increases. Confidence has been rocked and sheep farmers will be carefully watching the factories on price over the coming weeks.”
Following a request from the IFA, Bord Bia has agreed to bring forward their lamb promotional campaign to early June. The campaign will kick off next week and the major TV advertising is being brought forward to June 11th and extended for a four week period out to July 8th.
James Murphy told the factories the future of the sheep sector is primarily dependent on the price they can secure in the market and are prepared to return to farmers. “The factories have to step up to the mark on price. All of the hoggets overhanging the market will be gone this week. The supermarkets have moved over to new season lamb and will be commencing promotions. The French have started promotions and the Bord Bia campaign will kick off on the domestic market next week. There are some indications this week that supplies have slowed down and are beginning to tighten. In addition, the weather has turned positive in France and across Europe which should help consumption.”
On Quality Assurance, James Murphy made it very clear that factories must reward producers properly. “The current 6c/kg is totally inadequate. Producers are losing interest in the scheme because of the lack of a real price reward. IFA is very strong on encouraging farmers on quality assurance but the factories are going to have to do their bit with an adequate price reward.”
James Murphy said with lambs finishing faster this year farmers need to continue to select lambs carefully and move them as they become fit. He said with the on-going challenges on consumption, it makes no sense to add to volumes by providing factories with quantities of free meat through overweight lambs. He told the factories they must reward producers that meet the market specification a lot better in terms of price premium.
He said the sheep industry needs much more co-ordination, planning and market signalling. “The sheep sector must find a better way other than a price crash approach around the change over from hogget’s to new season lamb.” Total sheep supplies at the factories are only up 34,000 head to date this year and the value of the fifth quarter remains very strong.