Winter finishing is “finished”, the Irish Cattle and Sheep Farmers’ Association (ICSA) has claimed, because factories are cutting prices on a “weekly” basis it said.
The association is also warning that it is not “economically viable” for farmers to continue to produce sustainable beef for supermarkets “at a loss”.
Edmund Graham, beef chair with the ICSA, said that, fundamentally, it is no longer possible for farmers to consider finishing cattle at two years of age out of a shed in the current economic climate.
“The economics of any winter finishing system do not stack up as prices have fallen nearly €1/kg since June,” he said.
“This week, factories are quoting as low as €4.55/kg which is totally unsustainable considering current escalating costs.”
Graham said the ICSA has repeatedly engaged with Teagasc in relation to feeding costs because of the rising cost pressures which farmers are facing on a daily basis.
“Some of our producers are calculating daily feed costs (including all fixed and variable costs) of up to €9/day,” he added.
“Teagasc [has] a sum of €6/day, but that includes a period of low-cost grazing in the autumn.
“Typically, we might aspire to a carcase weight gain of 0.6kg/day. At a price of €4.55/kg plus QAS bonus of 20c/kg, a typical R3 steer will fetch €4.75/kg. This works out at €2.85/day which makes intense winter finishing utterly insane.”
According to the beef chair, the ICSA is now urging winter finishers to “do their sums”.
In Graham’s opinion, producers should “inform their factories” that they will not feed cattle this winter to finish in springtime because the figures simply “do not stack up”.
He said it makes more sense to finish them off grass next summer.
The ICSA has said that current supermarket prices do not reflect the reality of production costs.
“It is beyond belief that beef is still being off-loaded in supermarkets at the exact same prices that consumers were paying three years ago,” he added.
“This is not economically sustainable. Farmers are being lectured continuously about what consumers want, but supermarkets cannot expect that this can be delivered at a loss by farmers.
“If consumers want more sustainable beef, retailers need to explain to consumers this comes at a cost.”
Last week, the ICMSA also accused beef processors of “hiding behind” the recent fall in the value of the pound sterling to reduce prices paid to farmers.
Des Morrison, the association’s livestock chairperson, said that the ICSMA did not accept that the pressure in sterling and loss of economic confidence in the UK was “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 triggered the notable fall in sterling against the euro,” Morrison added.