‘Drop off in cattle numbers – price hike likely’
A drop off in cattle numbers should result in a strengthening of beef prices over the coming months, according to ICSA general secretary Eddie Punch.
“Cattle numbers have remained remarkably resilient since the beginning of the year,” he said.
“Year-on-year to date cattle numbers have only fallen by around 40,000 head. In part this is due to the fact that significant numbers of animals have been finished that little bit earlier than would have previously been projected.
“But the salient fact is that finished cattle number will start to decline at some stage over the coming months. And this will lead to a consequent increase in farm gate prices.”
Punch also believes that Irish farmers are not receiving the full benefit of the recent movement in EU: Sterling exchange rates.
“This means that certain groupings within the processer/retailer network are holding on to excessive margins, at the expense of farmers.”
Punch said that the Euro may well remain relatively weak against Sterling for the foreseeable future.
“The only factors that could impact on the current situation is a Greek exit from the Euro and the possible reaction of the money markets to the upcoming EU membership referendum within the UK.”
Commenting on the outcome of the recent Beef Roundtable meeting, Punch said that the factories had still to justify their decision not to increase the maximum 30-month age limit within the current beef classification scheme.
“This may have had some justification at the height of the BSE crisis 20 years ago. But it is hardly a key driver for consumers at the present time. In addition, the supermarkets do not flag up the age of the cattle from which beef has been sourced, when it comes to marketing the product in retail outlets.”
Punch also believes that Bord Bia must do more to have the 30-month age restriction removed in the context of selling Irish beef outside the EU.