February 24, 2010

Irish beef processors urged to increase cattle prices

The Irish Farmers' Association (IFA) has urged meat factories to increase cattle prices in line with returns from Ireland's main export markets as current loss-making prices were shrinking financials of winter finishers.

IFA president John Bryan said farmers selling cattle are losing money at a base price of EUR2.90-2.94/kg and factories are putting feeders into an impossible situation with their banks.

Bryan said beef factories must pay farmers a viable price for cattle or accept the inevitable consequences of a return to seasonable production, a reduction in the breeding herd and more live exports.

He also warned factories that their low price short-term gain strategy is driving the beef sector back towards a major seasonality problem and encouraging live exports as the only option to secure profitable prices.

He noted an additional 26,000 cattle processed in the first six weeks of the year, and that cattle numbers are beginning to tighten.

The IFA president said cattle prices in the UK are equivalent to n3.32/kg and prices across our main EU markets are ranging from n3.30/kg-3.80/kg. He said increased numbers of finished cattle are moving to Northern Ireland at prices of n3.13/kg for R grades.

To address farmer concerns over the factories introduction of the Quality Payment System (QPS), Bryan stated that the IFA has requested Teagasc to undertake an independent assessment of the QPS to ensure that it is cost neutral and to quantify the benefits.

John Bryan also called on the Department of Agriculture to reassure farmers regarding the accuracy and independence of the mechanical classification machines in the meat factories. He said the department must reassure farmers and set out the independent audits they undertake on the mechanical classification machines to ensure that they are operating accurately and within the specified EU regulations.

The IFA President said Teagasc must also come forward with a plan setting out how livestock farmers can best utilise the QPS to maximise price returns and reduce their production costs within their individual livestock enterprises.