Beef processors are “hiding behind” the recent fall in the value of the pound sterling to reduce prices paid to farmers, according to one farm organisation.
The Irish Creamery Milk Suppliers’ Association (ICMSA) said yesterday evening (Wednesday, October 13) after a meeting with Bord Bia that “frank and unvarnished opinions” were expressed there on the issue of falling beef prices.
Des Morrison, the association’s livestock chairperson, said that the ICSMA does not accept that the pressure in sterling and loss of economic confidence in the UK is “any kind of rational explanation for the fall in beef prices experienced over recent periods”.
“The first thing to note is that the slide in beef prices comfortably predates the latest sterling slide.
“Beef prices have fallen by approximately 80c/kg since June. Factories were sliding prices down at least two and a half months before the ‘fiscal statement’ of September 23, triggered the notable fall in sterling against the euro,” Morrison said.
He added: “The second thing is that even if consumer sentiment in the UK is preparing for a recession – and we concede that it is – then their purchases will switch to manufactured beef, and indeed we see a proportionate growth there as consumers look to ‘one pot’ dinners that will use less energy and don’t rely on premium cuts.”
According to Morrison, this demand for manufactured beef will outweigh the fall in sterling to euro.
The ICMSA livestock chairperson said that the current 30c/kg differential between the Irish price and the European average for prime beef is the highest it has been in years.
At the meeting, ICMSA asked Bord Bia to engage to a greater degree with restaurants and hotels. Morrison said that the association did not accept that marketing higher value cuts was difficult in the face of consumer anxiety about a downturn.
“We wouldn’t accept that at all, and we would feel that there’s an unfortunate degree of resignation and ‘giving up’ about that attitude. We have to keep the market for more high-end cuts because it’s the demand there that pulls the whole carcass price upwards or downward,” Morrison commented.
He added: “We want Bord Bia to get into that sector and find out what it thinks because that group is ultimately the best marketer for our grass-fed beef.”