IFA president Eddie Downey said the move by the factories to hit prime in-spec steers and heifers with new price and weight cuts this week, following their meeting with Agriculture Minister Simon Coveney, shows scant disregard for the minister and farmer suppliers.
“The time has come for Minister Coveney to stand up for farmers and reject the factories’ tactics,” said Mr Downey.
“IFA has worked hard to secure a new ferry route for live cattle to the UK. The minister must remove the artificial blockages preventing the expansion of the live trade, including the labelling difficulties. This is a market access issue preventing the operation of the EU single market.”
Mr Downey sought a guarantee from the minister that the Dept of Agriculture’s AIMS database is confidential and factories do not have access to the herd profile of individual farmers.
He said the collapse in bull beef prices since last December has inflicted severe losses on winter finishers. Some bull beef finishers are taking a financial hit of €200 to €300 per head and struggling to get cattle killed before more severe price and spec cuts are applied. He said income losses at finishing level will also impact on store and weanling producers.
Mr Downey said the factories and their supermarket clients cannot change the goalposts in the middle of the production season, adding that farmers calving cows or buying cattle this spring are at a loss as to the direction they should take.
However, Cormac Healy of Ibec’s processor body Meat Industry Ireland (MII) said factories have been returning a strong price. The total kill for the year to date is up 6% on this time last year, and the advice on animal specifications has been that there is a strong market for grass-fed steers and heifers, and for bulls up to 16 months.
“The unavoidable reality is that the market is weak,” said Mr Healy. “There is very little going on in terms of retail promotion activity in beef, and there is a poor manufacturing beef trade.
“While the price is a bit behind where we were last year — which was a very good year for beef — it is in line with 2012. In terms of the spec, to get the best price, the animal has to hit the sweet spot. As for bulls of 24 months, that is something the market just does not want.”
Mr Healy said the fact that Ireland exports 90% of its beef output impacts upon factory prices, whereas the price in other EU countries tends to be pushed up by a strong domestic market.
In terms of the overhang of young bulls, the factories have upped their kill level from 4,000 in the first two weeks of 2014 to 5,500 in the third and fourth weeks, while some recent weeks have seen up to 6,500 young bulls killed.
Minister Coveney last week held separate talks with meat factories and the IFA. He has expressed sympathy for farmers, but said the Government cannot dictate beef market prices.
“I am hopeful that the farming organisations and the meat processing sector will work together to overcome the various issues that have caused concern in recent weeks,” said Mr Coveney.
IFA national livestock chairman Henry Burns said the latest round of factory cuts and limits on in-spec cattle was avoidable as Ireland’s main markets in the UK and across Europe show signs of stability.
He said farmers are very sceptical about the expansion plans for beef.
“Farmers believe a strong live export trade for Friesian calves to Spain and Holland, weanlings to continental EU markets and stores to North Africa are essential to keep a competitive balance in the trade,” said Mr Burns.