Claim that beef processor 'narrative' on prices at odds with market
A farm organisation has claimed that a "narrative" from beef processors on prices is "at odds with the market".
In the last week or so, several outlets have moved to reduce their opening base price offers for beef cattle.
As reported by Agriland this week, outlets in the north and west of the country have held more firm on price offers, but more of the southern outlets are talking of reducing the higher offers for later this week.
It remains to be seen to what extent the price reductions will materialise but several procurement staff sound adamant that "money has to come out of the trade".
They are warning their beef suppliers to "err on the side of caution" on price per kilo when buying-in store cattle for winter finishing.
According to Michael O'Connell, livestock chairperson for the ICMSA, the factories are suggesting that the market is experiencing downward price pressure.
O'Connell said there is "no basis" for suggestions of that nature, citing "opportunities" across the UK and EU for Irish beef currently.
"Over the past month, we have seen the price of the Irish O3 and R3 steers increase by 20c/kg...as well as a notable shift to bigger kill plans to correspond with the increased appetite for prime cattle that has emerged over the past five to six weeks," O'Connell said.
He also claimed that there was a "obvious direct line" from the ban on imported beef from Brazil into the EU to the "significantly increased throughput and price.
The IMCSA livestock chair said the factories "wouldn't increase kill plans unless they see the benefit in so doing".
According to O'Connell, factories are paying significantly more at mart rings than they are for farmers to send the cattle in.
"How can processors give up to 20c [or] 30c/kg more for cattle ringside than they would pay farmers to kill them?
He said that prices paid ringside are "a long way ahead" of base prices that factories are quoting.
O'Connell called on beef processors to "build relationships with farmers".
"The factories have to realise that no-one, absolutely no-one, can be expected to fill sheds again paying current prices on the basis of a factory whim," he added.
"There is so much money involved now and all the variables outside a farmer's control - feed, fertiliser, and energy costs - are all rising. We need a commitment, a guarantee for these farmers," the ICMSA representative said.
"It's up to the factories to start accepting reality and pay what the current markets are dictating," O'Connell commented.
