The Irish Creamery Milk Suppliers’ Association (ICMSA) has branded last week’s beef price cuts as “deliberate, targeted and geographic”.
The chair of the association’s livestock committee, Michael O’Connell claimed that the Irish beef market is now becoming “a rigged game”.
“We note that the increased number of forward and beef cattle in certain marts this week and we also note that they were bought by factories or feedlots for either direct slaughter or short-term feeding,” he said.
ICMSA
O’Connell alleged that there is a “very calculated policy” of trying to control beef cattle numbers.
He claimed that prices being paid in the midlands and north-western regions were being kept up, while prices were being cut for more southern farmers.
“The calculation seems to be that the more chance the farmers have of sending their cattle over the border, the higher the price the factories will offer with those prices subsidised by cutting the prices in Munster where the farmers might baulk at the costs of sending their cattle north,” he said.
O’Connell noted that live exports to Northern Ireland are up by 37% in the year to date.
He believes that factories are trying to offset the ‘Northern’ option by exerting even more control on supply and throughput through the use of feedlots or “Controlled Finishing Units” (CFUs).
“We see now that 25% of the beef kill is coming from these feedlots and real bottom line here is that this represents the last piece in the total takeover of the Irish beef sector by the factories.
“The idea that we have a normal supply-and-demand operation in the Irish beef sector is just a illusion.
“The rise and rise of the feedlots owned by the factories is taking the last bit of farmer choice out of the market and means that the factories now have complete control,” he said.
Beef
The ICMSA Livestock chair called on the Agri-Food Regulator to launch an immediate investigation into what he called “this two-tier pricing model”.
O’Connell added that farmers must look at marts as an increasingly better option than factories.
“Marts remain the most lucrative option but at factory level, flat prices are available for in-spec Hereford, Angus and Friesian cattle with up to 530c/kg being paid for mixed lots of steers and heifers,” he said.
“The kill at present is all shed cattle, and the late spring has seen cattle turned out to grass up to six weeks later than usual. That means that grass cattle are still up to two months away.
“The factories know there is pressure coming and they are going to try and artificially ‘drop’ the price before they have to raise it in the gap between shed and grass,” he said.