CAP reality bites as calves lose out on double premia
For traders of male cattle, the CAP Mid-Term Review has already taken out value of up to €310 per head.
The trading picture has changed even more radically for beef finishers buying weanlings next spring.
"Farmers must realise that the Fischler Reform is no longer a set of proposals, they are now reality, and the biggest challenge between now and 2005 is to effect a smooth change over", said Derek Deane, chairman, IFA National Livestock Committee last week.
He added, "Farmers have to realise that payments will no longer be linked to production, and they should gear to produce what the market wants, and get the best price. Processors must bear in mind that there will be no reason for farmers to produce, unless there is a profit".
Mr Deane said that the Fischler proposals are more important to Ireland than any other member state, and future market prices must be attractive enough for Irish farmers to produce.
"We have to get people thinking now on the implications of the change and we have to look at all of the mechanisms to smooth the change-over. Beef prices will have to rise, if production is to be maintained, because there will no longer be a necessity to produce to qualify for direct payments", he said.
Putting current markets in perspective, he said, "In 1986, I got £60 for a lamb and a workman earned £25/day. Yesterday, I got £60 for a lamb and a workman earns £80 a day".
Eddie Punch, General Secretary, ICSA, said that most farmers were not yet conscious of the impact of the change and its immediate implications.
"I believe a lot of farmers buying calves now will have to apply for the single bull premium at the higher rate on these animals, instead of the 9 and 21 month premiums, and will have to defer castration. Bull calves registered since the beginning of May will not qualify for the 21 month premia before the CAP Mid Term Review change-over and, therefore, will not get extensification. It is unlikely that they will be slaughtered in time to get the slaughter premium".
While sales of calves are light at this time of the year, the market changes will become more evident next spring in calf and weanling sales and the calf export trade.
