Beef price reduction out of line with market, ICMSA

The current strategy being adopted by meat processors of cutting prices when there is an on-going shortage of beef in the UK and the Continent is extremely detrimental to the Irish beef sector and is undermining farmer’s ability to make a decent return from beef production.  This was claimed by Michael Guinan, chairperson of ICMSA’s beef and cattle committee.

In the past number of weeks, factories have being playing a game with farmers by reducing quotes and making it difficult for farmers to get cattle killed and it is disgraceful that meats plants are simply taking advantage of their dominant position, claimed Guinan.

“Beef farmers are still recovering from that prolonged bad weather period, which resulted in mounting debt on farms by trying to maximise fodder saving in the last number of weeks. Processors are cutting prices in the expectation of higher supplies in the next number of months and this leaves a bad taste with farmers who are trying their utmost to survive.”

He said  the practice of dropping prices at this time of year has been ongoing for a number of years and beef farmers are amazed given the continued high prices in the UK and supply shortages in mainland Europe.

“While processors might argue that reduced prices are due to supply and demand, the facts are not as straightforward. Up to the end of June, total disposals were some 9.5 per cent ahead of the equivalent period last year, at 690,000 head. Prices increased and held up during this time, it is baffling to see why they have started to fall now.

“It is important to remember that factory throughput was just under 1.4 million head last year, which was the lowest cattle kill for more than 15 years and with an increase of 10 per cent forecasted for 2013 it will still be the third lowest kill in that time period. Supply remains tight relative to other years and yet how processors see fit to drop prices is incredible,” concluded Guinan.

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