‘Factories need to pay sustainable prices’ – ICSA

Commenting on the publication of Teagasc’s mid-year review of agricultural markets and farm incomes, Irish Cattle and Sheep Farmers’ Association (ICSA Ireland) president Gabriel Gilmartin has said that only the dairy sector can take comfort from strong product prices this year.

“Tight margins in cattle and sheep mean that these sectors are extremely vulnerable to higher costs and recent squeezes on beef and lamb prices are going to play havoc with cattle and sheep incomes when the final analysis for 2013 is completed,” he said.

Despite a forecast by Teagasc that strong beef prices would offset the high costs associated with the fodder crisis, ICSA beef chairman, Edmond Phelan sounded a note of caution.

“It is positive that R3 prices were on average six per cent higher in the first half of this year compared to the same period last year; however, that trend is very unlikely to continue for the second half of 2013.  This figure is actually masking the fact that as we head into the busiest time of year for beef sales – late summer/autumn – factories are actively pulling the price of beef.”

He continued: “The prices for cattle have been falling since early June, from around €4.60/kg to €4.15/kg today.  This means that it is far from certain that the higher costs associated with the fodder crisis will be offset to any great degree by the output prices as the year goes on.”

ICSA sheep chairman Paul Brady added that from the perspective of lamb producers, the lower prices compared to the first half of 2012 make little sense.  “We know that supplies are tight, as a result of the bad weather and Schmallenberg Virus, among other factors.  We also know that exports remain strong.  However this situation is not reflected in the prices being paid to producers – it is hard to make sense of that.”

Concluding, ICSA president Gilmartin said: “It’s clear that factories must start paying sustainable prices to primary producers in the cattle and sheep sectors; otherwise the future will be uncertain for these industries.”

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