‘Increased production always results in a price drop for farmers’
Increased beef production has always resulted in a price drop for farmers, according to ICSA Beef Chairman Edmond Phelan.
Phelan was critical of the new Meat Industry Ireland (MII) beef policy document, which he described as being bad news for farmers.
“History has shown that if cattle numbers go up price comes down. Recent weeks have seen a severe fall in beef price, partially blamed on Brexit but clearly also linked to cattle being too plentiful.
“We have also seen that the meat industry will pay as little as they can get away with ,not what the market will return,” he said.
Phelan said that factories demands to produce more so others can profit just won’t cut it for farmers anymore.
We need to get to a position whereby the relationship processors have with producers is one of partnership.
“Opportunism, such as processors dropping prices after a night of heavy rain, has no place in such a partnership.
“While many farmers have the potential to increase production, ICSA would see no point in going that route until farmers are fully confident in being rewarded for their efforts,” he said.
The Beef Chairman also said that the group looks forward to working with MII to draw out exactly how the increase in production would benefit farmers.
The comments from the ICSA Beef Chairman follow the publication of Meat Industry Ireland’s beef policy document, Irish Beef Sector – Delivering Growth.
Under the policy document, the body representing beef factories suggests that beef output can increase by 80,000t per annum under Food Wise 2025.
This increase in volume is expected to deliver up to an additional €500m in additional export earnings for the beef sector.
According to Cormac Healy, Director of MII, this will deliver additional employment throughout rural Ireland and it can also boost producer margins and processor efficiency.
This growth in output has already started, with an additional 60,000 head forecast to be processed this year and a further increase of 100,000 head in 2017.
“This already equates to an increase of approximately 50,000 tonnes in output by 2017 compared with 2015,” he said.