The Irish Creamery Milk Suppliers’ Association (ICMSA) has said that the attempts of several factories to drop prices this week are “unwarranted and unacceptable” and “will fail”.
Chair of the ICMSA’s livestock committee Des Morrison said that at a time when “farmers are supplying finished cattle to meat plants after a year of unprecedented input cost increases”, it is extremely disappointing that meat plants would “attempt to undermine their own suppliers”.
However, labelling the attempts “cynical opportunism”, the chair said that factories will ultimately have to pay proper prices to farmers.
“The reality is that cattle supplies will be tight until at least June,” he said.
“The beef supplied by farmers during this period will have been expensively produced and meat plants are simply going to have to pay a price for that beef that reflects and reaches above the cost of production.
“These attempts to manipulate and pull prices will fail because the facts won’t change and can be ascertained by all,” he stated.
A reduction in prices would be completely at odds with current market trends according to Morrison, who outlined that in this week alone, beef exports to China recommenced, there was a suspected case of bovine spongiform encephalopathy (BSE) in Brazil, and the EU and UK markets have been strong.
“There is absolutely no market basis for meat plants to cut the price paid to farmers.
“What we are actually seeing now is the meat plants emptying their own feedlots to artificially boost cattle supplies and so drive down prices for farmers.
“They want to undermine farmer confidence by cutting prices in a way that will allow them to replenish their feedlots again through reduced farmer confidence around the mart ring. It’s very cynical and has no basis in real data and real figures,” stated Morrison.
He called on farmers to resist any attempt by factories to make them take lower prices in the coming weeks, and said that the plants themselves should accept that they must pay suppliers properly.
“The meat plants would be far better off forgetting about these transparent and tricky moves to boost supplies and just realising that the best way of ensuring seasonal supplies going forward is to pay the farmers to produce the beef,” he concluded.