Livestock farmers are still reeling from the sustained drop in beef prices since this summer’s Brexit vote, said IFA national livestock chairman Angus Woods.
The national average factory price for steers stood at €4.20/kg for steers and €4.33 for heifers the week prior to the UK’s surprise June 24 referendum vote to leave the EU. Irish factory prices then fell 6-8c/kg most weeks, falling to €4/kg for steers and €4.10 for heifers by mid-July.
Average factory prices in Ireland are now around €3.70/kg. In the UK, the factories were paying the equivalent of €4.48/kg on average.
Mr Woods said Irish farmers also find it hard to accept processors’ explanations for the growing gulf in the price being paid for beef between Irish and UK retailers. Last week’s average UK retail price stood at €9.06/kg versus €8.92/kg in Ireland.
“The factories can give you any jargon they want to explain those price differences,” said Mr Woods.
“They will talk about how the UK consumer wants to buy British beef, but the truth is that the UK doesn’t produce enough beef to fill the market demand.
“The British are not self-sufficient in beef. We are only looking for a fair portion of the market price. The consumer is paying a fair retail price, but what is happening to the price in the space between the consumer and the primary producer is far more problematic.
“It’s very hard to get access to any information on the prices and profit margins being taken by the retailers and the processors. We need far greater transparency in the food supply chain.
“We have been very surprised by the way the factories have been dropping their prices in unison since the Brexit vote. They seem to be ready to take any opportunity to exploit the situation.”
However, the processor representative body, Meat Industry Ireland (MII), has refuted the IFA’s position on the fall in beef prices, noting that Irish cattle prices are 105% of the EU average. MII says that the impacts of the Brexit vote and market volatility have hugely impacted on Irish exports and prices.
“Today, Irish cattle prices are 105% of the EU average, a phenomenal performance given that the Irish industry exports 90% of what we produce into markets where the price of cattle has been consistently below the prices paid here for finished cattle,” said Cormac Healy of the MII.
“What IFA fails to acknowledge is that Brexit is a significantly negative event over the medium term for Ireland and its immediate impact is already being experienced in the exchange rate volatility and loss of competitiveness.
“Instead of pursuing a false premise about weak competition, we should focus instead on the real challenges and risks for our sector arising from Brexit. We need the Government to react quickly and decisively to ensure that Ireland’s food exporting sector is strongly positioned to withstand these competitive threats.”
The volume of Irish beef sold into the UK fell by 20% during July, according to figures published by AHDB, Britain’s department of agriculture.
The AHDB said beef sourced from Ireland and other EU countries has fallen due to the weakness of sterling against the euro making the product more expensive for UK buyers.
The total volume of beef imported into the UK fell by 17% or 3,994t during July 2016 versus July 2015. The UK is Ireland’s main target market, accounting for 52% of all irish beef exports, valued at more than €1bn in 2015.
Meanwhile, Mr Woods says he welcomes the leaflets issued by Teagasc on the presentation of clean cattle and sheep for slaughter as the number of dirty cattle rejected by factories has soared from around 17,000 to almost 30,000 over the last three years.
“It is important that the clean livestock policy is delivered in a farmer-friendly manner as people are under ferocious pressure,” he said.
Department of Agriculture analysis of the figures for rejected ‘dirty’ animals also shows that over 40% of problem cases were related back to feedlot cattle.
© Irish Examiner Ltd. All rights reserved