Factories issue warning on beef prices due to ‘challenging markets’
Irish meat factories have issued a warning on the prospects for beef prices this year.
Meat Industry Ireland (MII), the representative body for Irish meat processors, described the current market situation as “very challenging as a result of sluggish demand across all EU markets most notably the UK which is our largest export destination”.
Store prices too high
MII Chairman Philip Carroll said although Irish finished cattle prices have remained steady over recent months, UK or EU beef prices have not remained so and this continuing market fragility has not yet been reflected in prices for store cattle.
“Since the start of 2015 Irish cattle prices have performed well ahead of EU market prices and are currently at 109% of the EU average.”
Carroll says these prices must be viewed against contrary developments in the European markets where prices are continuing to fall.
“This is most evident in the UK where cattle prices have been falling for a number of months now and have sharply declined in recent weeks driven by a supply/demand imbalance and currency weaknesses.
“It remains to be seen if this recent decline in UK cattle prices represents a reversal to past price norms evidenced in that market. Similarly in other key markets, France in particular, where the focus for some time now has been towards domestically produced product, there is weak demand for imported product,” he said.
Dependence on export markets
Continuing, Carroll said that “given our dependence on export markets, Ireland is particularly exposed to market volatility and the current situation once again highlights the need to have as many international market outlets available as possible.
“Worryingly, the EU Commission is instead intent on making an excessive offer in trade negotiations with Mercosur which will cause even further levels of uncertainty and instability in EU beef markets where consumption has declined by 500,000 tonnes over the past few years.
“It is not too late for the Taoiseach to intervene with EU Commission President Juncker to prevent this damaging initiative,” Carroll said.
Access to markets
He said MII has continuously pressed for the conclusion of negotiations with the US on completing access to the manufacturing beef trade and has called on the Minister for Agriculture, Food and the Marine to make direct contact in the coming days with his US counterpart to overcome any remaining impediments to achieving full market access.
“Similarly, further political efforts are necessary to secure full access to the Chinese market following the conclusion of an initial inspection mission undertaken by a Chinese delegation earlier this year,” he added.
According to Carroll, the prompt opening of these markets and the protection of the EU market from preferential access to Mercosur countries will be critical to underpinning the sustainability and performance of Irish beef in EU and international markets.