The Irish Creamery Milk Suppliers’ Association (ICMSA) has called for a substantial increase in factory beef prices in order to keep pace with rising input costs.
Chair of the ICMSA Livestock Committee, Des Morrison said that the pressure on farmers from spiraling input costs, which began in the middle of last year, has continued this month.
As a result, he said that improved factory prices being offered to producers have been “overtaken”.
“We are already working on the basis that in net terms farmers finishing cattle today and into 2022 are likely to be in a worse position than they were at the start of 2021.
“The margin from beef production is very tight and the wildly increased costs have wiped out our margin and gone out through the other side into net loss-making,” Morrison explained.
Beef prices
The ICMSA livestock chair noted that the outlook for beef this year is positive at both EU and global levels and called for this to be translated into higher prices immediately.
“The other short-term point is that the meat processors do not use their feedlots to undermine farmers who have invested in finishing cattle in the coming weeks and months.
“These farmers have incurred substantially increased costs and it is up to our beef processors to acknowledge this and deliver a stronger return from the marketplace immediately,” Morrison added.
Morrison outlined that there is still anger among farmers about the behaviour of some beef processors last February.
“Beef producers are sick to the teeth of processors using every opportunity to make substantial profits on the backs of farmer,” he said.
“The data shows that cattle numbers are not in plentiful supply going forward and processors can forget about using staffing or distribution difficulties as an excuse to not paying a viable return to beef producers – especially winter beef producers,” Morrison added.
The ICMSA representative pointed to the UK where he claimed that processors paid farmers €5.06/kg, including VAT, for R3 steers on the week ending January 15, 2022.
However, he outlined that Irish processors are paying farmers €4.55/kg, including VAT, for the same grade.
“If processors continue to use their own feedlots to control the supply of finished cattle at the expense of beef producers, then they are going to find themselves very quickly having to develop a 52-week supply from those same feedlots,” Morrison concluded.