Beef prices will need to hit €6/kg to help farmers offset crippling input costs, according to the Irish Cattle and Sheep Farmers’ Association (ICSA).
Prices paid by factories to farmers for steers and heifers have hit record highs in the past week. It is understood that prices are “looking good” for the coming months.
However, despite those record prices the potential profits to be made by farmers have been eroded by huge increases in inputs such as feed, fertiliser and electricity.
ICSA Beef Committee chair, Edmund Graham believes that base beef prices will have to climb to €6/kg to ensure cattle farmers can cope with the rising costs and inflation.
“A small percentage of farmers are achieving €5+/kg when bonuses are added in, but when costs are spiralling out of control it’s just not enough and we need to see base prices rise significantly,” he said.
“Until recently €5/kg would have been viewed by farmers as the minimum price needed to make ends meet. Indeed, this is what Teagasc were saying as far back as last autumn.
“With costs getting so out of control it is wishful thinking that €5/kg would cover our production costs now. Fertiliser prices have gone through the roof, and feed prices – which have already reached record highs – look set to rise even further,” the ICSA chair added.
“Teagasc have now estimated that inflated feed and fertiliser costs are adding around 65c/kg to the cost of producing beef. But it’s not just feed and fertiliser prices that have gone up, inflation is hitting all our costs and it is wiping out any potential to break even at current prices.”
Graham stated that the Russian invasion of Ukraine would likely drive up wheat prices, which will impact on all feed costs.
“Ukraine is also a significant exporter of fertiliser, and all of this means that producing beef at €5/kg will not be viable,” he concluded.