Partial reprieve on subsidy averts withdrawal of cattle
While supplies of cattle were available as normal to the factories on Monday, slaughtering during the first half of the week was lighter than usual, with a number of processors holding back on slaughtering until to-day and to-morrow because of adequate meat supplies in stock and weak export market demand.
But the last minute intervention by the Minister for Agriculture, Joe Walsh TD with the offer of a three month partial restoration of the Government subsidy towards rendering costs has left unfinished business which neither the industry or the beef producers are happy about.
An issue of cost on rendering charges, and who pays for the service, remains to be resolved both in then short term and longer term after May 31st 2003 when all Government subsidy will cease.
As factories faced a serious situation of possible closure this week, with the withholding of all cattle supplies by producers over the additional costs being imposed for the rendering, Minister Walsh agreed to provide E7m in funding to pay E250/tonne towards the rendering costs for three months, instead of the previous support of E460/tonne.
Industry sources have estimated the cost of the deficit at equivalent to E5/head on cattle between now and the end of May, increasing to about E15/head when the subsidy is withdrawn on June 1st.
The Renderers Association chairman, David McDowell, has told the processors and the producers that the immediate shortfall will have to be paid by the livestock industry, and the renderers will not continue to provide the service unless they are paid for it.
John Smith, Chief Executive, Irish Meat Association, representing the processors said that his members cannot afford to carry the additional cost and inevitably it will have to be paid for by the producers.
Producers have rejected out of hand any additional costs being borne off the price of beef, which they claim is currently E100/head under the economic price, on top of which they have to bear the increase in disease charges and the additional cost of BSE testing for animals over 30 months.
Some of the processors withheld quoting for cattle on Monday last and others reduced their prices by a further 1p/lb, blaming weak export markets and the impact of sterling and the dollar as justification for the reduction.
Producers are now furious that the generally quoted prices this week of 84p-80p/lb for R/O grades is costly them dearly in losses having dipped below the break even point on top of which they have to carry the additional costs of slaughtering at the factories.
While some relief has been secured in the short term towards the cost of rendering the resolution of the longer term policy, post May 31st next still remains to be resolved, with the prospect of having to carry the burden threatening producers.
