Minister issues autumn beef profits warning to store buyers
Asked by Cork East Fine Gael TD David Stanton for his proposals to restore profitability to winter beef producers who are currently losing money, Minister Walsh said store cattle have been 11.7% dearer this year. Those without a premium have been making about 300 with their weight, and up to 1,000, if one can draw two premia on them.
“I find it difficult to understand how farmers pay that amount of money for store cattle and expect to make a margin next autumn, but that is what is happening,” he said.
He said profitability depends on prices for finished animals, farmers’ cost structure and, critically, the prices paid for young animals.
“Cattle are making about 200 more per head than they were in 1999 in terms of premia,” he said.
Minister Walsh said the prices paid by processors for cattle is a matter for direct negotiation between beef producers and individual beef processors.
The major determining factors were the availability of and ease of access to markets, the returns from those markets and, in the case of third countries, the level of export refunds.
Other factors includes efficiency at processing level and the extent to which value is added to the primary product.
“My function in relation to cattle prices is to set the policy parameters and support framework and to seek by every political and diplomatic initiative to secure access to markets,” he said.
He said current cattle prices must be seen in the context of the Agenda 2000 Agreement which provided for a 20% reduction in institutional prices, in return for a substantial increase in premiums of about 27c per lb in the case of steers, compared to 1999.
Current prices for steers in Ireland are roughly at the same level as 1999, noted the Minister.
