MII pushes back: Criticism ‘fails to recognise strong price’ in 2018

Meat Industry Ireland (MII) has pushed back on recent criticism of beef processors, defending its “strong price throughout the year”.

Cormac Healy, director of MII, made the comments earlier today (Tuesday, October 2) ahead of the Beef Forum set to take place tomorrow – without the participation of the farming organisations.

“Recent criticism of beef processors on beef price performance fails to recognise the strong price paid throughout the year, with Irish cattle price running at 107% of EU average price year-to-date,” he said.

The industry representative added that it also ignores the “challenging market environment at play” since mid-summer, particularly across northern Europe.

Frustration with the recent weakening in Irish cattle price is understandable, but criticism of beef processors ahead of the upcoming Beef Forum fails to take into account market realities.

Healy added it also omits the fact that the year-to-date price paid for Irish cattle remains ahead of last year and said that only in the last two weeks have current prices dropped below the corresponding period last year.

“We have had strong finished cattle throughput levels over the last two months. The number of animal processed by the industry year-to-date is up 3.5% or 45,000 head.

“This additional Irish beef output is coming onto an EU market already in strong supply. The drought experienced across most of northern Europe over the summer and the related higher-than-normal culling rates have resulted in a strong supply of beef on the EU market.”

Healy added that another factor is that beef import volumes into the EU are up about 14%, with imports of competitively-priced beef from Brazil and Argentina alone up 30% in the first half of 2018.

“These imports comprise the higher-value cuts – thus displacing similar cuts from EU beef producers.

“This underscores our continued strong campaign in opposing an international trade deal between the EU and Mercosur,” he outlined.

Healy continued: “The exceptionally-high beef supplies across all EU markets has put pressure on manufacturing beef prices, leaner manufacturing products in particular.

“Also, there are heightened sensitivities around imported product in some markets, which has weakened demand and promotional opportunities for Irish beef.

With strong throughput levels over the summer and in recent weeks, market demand has not responded to absorb the additional output and we are seeing beef stock levels increasing.

“This is evident in the growing pressure on cold storage capacity. Taking account of all factors impinging on the market there are many challenges ahead for producers and processors and our interests will be best served by working collaboratively.”

Healy noted that export volumes remain good in the UK market, but noted that the latest Kantar Worldpanel data on overall retail beef sales in the UK show both volume and value of beef sales down by 4% in recent times, with volumes down by 2% in the last 12 months.

“This would indicate that less beef is moving through the higher value, retail channel,” concluded Healy.