Why the factories don’t want a repeat of the beef crisis

A repeat of what happened in our beef markets in spring 2014 would be ‘catastrophic’ if it were to happen again, according to Jonathan Forbes, Procurement Manger with Kepak.

Speaking at the Irish Grassland Association beef tour recently he said in terms of supplier processor relationships and trust it is ‘crucially’ important that together both farmers and industry work together to avoid such a situation arising again.

“A huge amount of work has been done in recent years by the meat industry in terms of securing and supplying new markets and building strong relationships with these customer bases.”

He told farmers if they produce to the market spec there is an opportunity to market their beef very well for those specs. However, he said the most difficult cattle to market and hence the lowest beef prices in spring 2014 were paid for heavy and out of retail spec carcasses.

However, Forbes also warned that Ireland, as an exporter of 90% of its beef, has to be always cognisant of world beef trends, production levels, consumption trends, as well as unforeseen events that creates price volatility like that experienced last year.

If european and world beef production increases by 1-2% that dynamic will change the landscape in which beef is marketed and Ireland as an exporter may feel the effects of this more than others, he said.

“It is about understanding the market spec, producing to that market spec and building strategic partnerships with these markets.”

Relationships

Forbes encouraged farmers at the event to get into a relationship and build a line of communication with a factory rep.

“Tell them what you’re doing and make sure what happened in spring 2014 doesn’t happen to you.”

Beef Price

Forbes was upbeat about the prospects for beef prices.

“The beef prospects outlook looks positive in the medium term, based on predicted national and EU availability and forecast consumption levels.

However, he warned that there may be a fall off in beef prices this autumn.

“I expect to see some fall off in price in autumn for usual seasonal reasons – Irish cattle prices are in excess of 110% of the EU average, which challenges our competitiveness in selling to these markets as more cattle come on stream.

“Despite this, and a deflation in fifth quarter export values due to the recent volatility in Asian markets, we don’t expect to see as significant a drop in the normal glut period of September to November.

“The Animal Identification Movement System is forecasting 60,000 less cattle between now and year end and that is going to impact on availability.”

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