Meat processors and farmers will try to work together to reduce the supply overhang of young bulls, on foot of a successful meeting between both sides of the debate.
Meat Industry Ireland (MII) has said it is committed to a constructive approach to the short-term oversupply of young bulls. Some 5,500 bulls were slaughtered last week, compared to 4,000 in previous weeks.
The MII’s goal is for this trend to continue. However, the MII is also urging young bull producers to use the UK buyers’ preference for bulls aged under 16 months as a standing guide for this category of the beef market.
With tensions growing in recent weeks, some calm has been restored following a meeting of industry delegations led by MII director Cormac Healy and IFA president Eddie Downey.
“We had constructive discussions with the IFA,” said Mr Healy. “Everybody wants to get through the build-up of young bulls in the system. We are staying engaged to work through the stock we have.
“With dairy expansion, there have been a lot of dairy progeny coming into the market, but there has always been a preference for steer heifer, and the specifications have always been critically important.”
Mr Healy said Ireland’s key point of market differentiation has always been in producing beef from heavier, grass-based steers. Other than the under-16 month UK market, opportunities are limited for young bull beef.
The MII director says producer prices for in-spec cattle have been maintained over the past two months.
“There will always be fellas out there who continue to do a good job with young bulls. Any farmer out there producing bull beef, who stays to the specs provided, will continue to find a ready market.”
However, the market may be tightening. Conditions are always more challenging in January and February as consumers across Europe alter purchasing behaviour in the face of the post-Christmas credit card bills, he said.
Mr Downey said the IFA had made it clear to MII that prices must stabilise and the bull kill must increase over the coming weeks to help alleviate the difficulties.
“IFA outlined to the factories that there is real frustration among beef finishers with the way bull beef prices have been cut in the last five weeks, and that producers are finding it difficult to get bulls killed.”
He said nobody was left in any doubt that prices must be stabilised immediately and bulls must be killed before any weight or age restrictions are applied.
In addition he said, prices and deals must be honoured and any delay in getting cattle killed cannot result in a price cut.
The IFA president said that factories have a real responsibility to resolve this problem quickly. He warned that farmers would not tolerate attempts by any factory to take advantage of the current difficulties.
IFA livestock chairman, Henry Burns, said farmers with bulls are extremely annoyed with the factories and particularly the way they have cut the prices over the last five weeks. He said some feeders are struggling to get bulls killed and are being pushed back and back by the meat plants.
Mr Burns told the meat factories that there are serious implications for the beef sector going forward from this episode. He said farmers will be very reluctant to keep calves or weanlings where the specification for the finished bull is such that it is near impossible for anybody to make a margin other than the processor and retailer.
In addition, he said this trend has major implications for the agricultural sector and the ambitions of Food Harvest 2020.
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