Winter finishing needs 'strong price commitments' from factories
Input costs have been a "huge challenge" for beef farmers this year.
Farmers "can’t take on risks and costs" of winter finishing without “strong price commitments" from factories, farm organisations have warned.
Irish Farmers’ Association livestock chairman Brendan Golden has said that so far this year the market has been “returning a pretty good price, and that’s very positive” and that there is room for stronger returns for farmers.
However, the input costs have been a "huge challenge" for beef farmers this year "because we’re low margin enterprises”.
“The rise in fertiliser, feed and fuel, it’s been nearly a step too far for some farmers; they’re saying ‘will we be able to survive at all going forward?’,” Mr Golden told the .
“But the positive thing I would say is the markets have been returning and they’ve been relatively stable and solid this year; if we had the prices we had a few years ago, and this high-costs situation came in, we would have been wiped out completely.”
Recent figures from Bord Bia show there have been over one million cattle processed in 2022 to date, around a 9% increase from the corresponding period in 2021, a positive that Mr Golden acknowledged.
However, Mr Golden stressed that factories must return increased production costs in beef prices to farmers, as they “can’t be expected to take on the risk and costs for winter finishing without strong price commitments”.
He also said that when farmers have cattle to sell, “push for as much as they can get”. “Look for as much as you can get because we know it’s needed and you’re asking the industry to return as much as they possibly can for the rest of the year.”
This week, Edmund Graham, beef chairman of the Irish Cattle and Sheep Farmers’ Association, has also urged farmers to demand more for beef cattle as supplies are scarce.
“Factories have been conditioning farmers to accept lower prices, but the reality is that supplies are tight, and factories are actively seeking cattle,” Mr Graham said.
“There is no reason to accept prices as low as €4.80-€4.90 a kilo. The cost of inputs has not dropped and there are reasons to be very worried that costs could get worse before they get better.”
Mr Graham said that farmers cannot be expected to produce cattle at this time of year for less than €5 per kilo. He said there is a “real puzzle” as to whether farmers will be able to finish cattle this winter at all given the huge escalation in feed costs.
“In our view, farmers would want contracts at €7.50 per kilo for next spring in order to be profitable and there is no sign of this happening,” Mr Graham said. He urged farmers “to do their sums carefully”.
“Farmers must be paid not only for the beef but also for their time and for the risk they take,” he added. “There are better options out there than putting massively expensive ration into finishing cattle in a high-cost winter system.”
The IFA’s Brendan Golden said that farmers feel they can carry the input price increases “for one year, but nobody sees much prospect of prices decreasing into next year”.
“It’s going to be critical that both the industry and Government stand behind us to get us across this,” Mr Golden added. “We want to try and ride this out. We do need the support to get us across this hump so we’re hoping that the minister won’t forget us in the budget.”
In the IFA’s livestock committee pre-budget submission this year, it has called for the Suckler Carbon Efficiency Programme to provide farmers a minimum €300 per cow payment for all suckler cows in 2023.
Other proposals include that the Dairy Beef Welfare Scheme must be expanded to include farmers who rear beef animals from the suckler herd including store and finishing farmers, with a minimum payment of €100 per animal.
The IFA in its submission also called for financial supports for suckler and beef farmers to offset the increased costs for feed, fertiliser, and fuel on farms based on their levels of production, along with calling for direct supports to be provided to farmers investing in beef production for the remainder of the year and into 2023.
