IFA MAKES IT CLEAR TO FACTORIES THAT CATTLE PRICES MUST STABILISE

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IFA MAKES IT CLEAR TO FACTORIES THAT CATTLE PRICES MUST STABILISE
29 Jul 2013

IFA MAKES IT CLEAR TO FACTORIES THAT CATTLE PRICES MUST STABILISE

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An IFA livestock delegation led by President John Bryan met with senior meat factory managers and Meat Industry Ireland today. After the meeting, John Bryan said IFA made it very clear to the meat factories that cattle prices must stabilise.

John Bryan said there was a frank exchange of views, with the IFA highlighting the unprecedented cattle price cuts in recent weeks and calling on the industry to immediately stabilise the situation and prevent any further erosion of confidence in the sector.

IFA Livestock Chairman Henry Burns said there is real anger on the ground against the way the factories have attacked prices over the last five weeks.

He said the beef factories have cut cattle prices by 35c to 50c/kg across the different categories or €130 (steers), €150 (heifers) and €145 (cows) since early/mid June.  “Price cuts of this magnitude are inflicting severe financial and income damage on livestock farmers and acutely eroding confidence across the livestock sector.”

The IFA Livestock leader said, “In contrast during the same period cattle prices in our largest export market in the UK, have remained relatively stable with Bord Bia reporting the most recent R grade steer price at £4.07/kg, for July 19<sup>th</sup>, which is equivalent to €4.97/kg incl vat”.

Across the main EU markets cattle prices have been relatively stable with Bord Bia reporting the average R3 bull price back only 7c/kg from mid June to mid July. As of 20/7/2013 Bord Bia report the following R3 prices incl vat. France steers €4.58/kg, bulls €4.07/kg, heifers €4.88. Italy bull €4.10, heifers €4.30.Germany steers €4.19, bull €3.80, heifers €4.02. Spain bull €3.86, heifers
€4.22. Northern Irl steers €4.62, heifers €4.61.

Henry Burns pointed out that since early June cattle supplies have remained tight with the weekly kill in the 26-28,000 range. Major factory price cuts at these levels point to a real lack of price competition, leaving farmers very sceptical of the industry’s Food Industry 2020 plans to grow output towards 40,000 head per week. He said this points to a real need for more competition and more live exports.

The IFA man said the latest price cuts have seriously damaged confidence in the beef sector and particularly the suckler cow herd. Recent ICBF data shows a 29% increase in beef cows leaving the herd and a 7.4% drop in calvings this spring.

“The factory price cuts combined with other factors have also impacted negatively on store and weanling prices. Mart data shows male store cattle are back €60 to €100 per head on last year. Heifer store prices are back €75 to €100. Weanling bulls are back €70 to €110 and heifers are back 30/50c/kg lw or €100 to €125 per head. Beef price cuts and store and weanling price falls of these levels will impact very negatively across the incomes of all livestock farmers this year.”

Following one of the most difficult winter and spring periods on record with a severe fodder crisis Henry Burns said farmers encountered major cost increases and are left with large bills to pay. “It is critical livestock farmers have a period of strong stable and profitable cattle prices to overcome these challenges and recover.”

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