Factory throughput could drop significantly in spring of 2023 as beef farmers look to finish their stock later in the year due to soaring input costs, the Irish Creamery Milk Suppliers’ Association (ICMSA) has said.
Chair of the organisation’s livestock committee Des Morrison said that he expects many farmers will choose to finish their cattle on grass and added that factories should be prepared to pay premium rates if they want animals between February and May.
“Nobody is going to spend a fortune finishing cattle on nuts and then bring them in to get a derisory price from the factories.
“We think that farmers are going to hold off until possibly April and finish them on grass,” he said.
Speaking about Irish beef prices, which are currently significantly further behind the European averages, Morrison also stated that he foresees a shift in this trend, and that prices will likely move “substantially upwards” soon.
“The average reported Irish R3 steer price as of a fortnight ago was €4.52/kg excluding VAT, which was down 27c/kg from mid-September. The UK equivalent was making €5.11.
“The EU price for young bulls increased 7c/kg from €4.99/kg to €5.06/kg excluding VAT, whilst the UK steer price increased 5c/kg from €5.07/kg to €5.12/kg ex VAT,” outlined Morrisson.
Analysing these prices, he added: “As is by now customary, Ireland is yet again the exception where our prices have fallen.”
This spring however, “could be the wake-up call that our beef factories need,” said Morrison.
“We have so many of these ‘vision’ and ‘forum’ reports that set out to look at the underlying problems in our beef sector and always seem to start and finish with what farmers must do.
“In the meantime, we have glaring anomalies around the prices paid by factories that are never addressed, much less answered.
“They [the factories] are going to have to get their prices up to a level that gives farmers a margin after their inputs and it’s going to take a lot for farmers to believe the factories will do that because we have been burned by them so many times before,” he added.
Weak beef prices in Ireland were the subject of a last-minute meeting held in Co. Laois last week (Tuesday, November 22) by the Irish Farmers’ Association (IFA) where there were heated exchanges between farmers and processors.
More than 250 farmers turned out to express their frustration at the significant lag between Irish prices and the European benchmark.
Representatives from Teagasc, Bord Bia and Dawn Meats were present who presented an in-depth market outlook and attempted to alleviate concerns.