Recent beef price cuts – described as “opportunistic, misguided and short-sighted in the extreme” – have knocked €180 off a 400kg carcass, according to the Irish Cattle and Sheep Farmers’ Association’s (ICSA’s) beef chairman, Edmund Graham.
The Monaghan farmer argued that – with drought conditions prevailing right around Europe – feed is getting scarce and the price of producing food is rising.
On the back of processors pulling prices for the last number of weeks, Graham said: “The message that should be communicated to retailers is that price rises are required due to the massive increase in input costs.
Prime cattle that were selling up to recently at €4.30/kg are making just €3.85 today. On a 400kg carcass, that’s €180 of a cut – which anybody can see is completely unsustainable.
Continuing, Graham outlined that rising grain prices throughout Europe during a drought is an indicator of a “general increase” in commodity prices.
“It is galling that processors should penalise primary producers at a time when their costs are escalating. It again highlights the lack of solidarity shown to producers from processors and retailers.
“Worse still, it defies economic logic to be translating increased costs of feed into lower food prices for supermarkets.
Although prices paid to farmers have plummeted, demand hasn’t fallen. There are no indications that factories are having any difficulty selling beef or that fridges are full to capacity.
‘Shared’ burden
The industry is also coping with “huge numbers of dairy cows” being presented for slaughter, which is having a “big impact” on the price suckler and beef producers can achieve, Graham maintained.
The ICSA’s beef chairman is of the opinion that the “opportunistic” price cutting by processors “places the entire financial ramifications of this drought on producers”.
This is a burden that should be shared and momentum towards establishing fair play for farmers needs to be placed higher on the agenda.
Graham was extremely critical of the processor price setting in recent weeks.
“The amount of mental stress on farmers at the moment is frightening and processors have a lot to answer for when they use the drought to screw farmers at a very vulnerable time,” Graham said.
‘Wrong and unjustified’
Defending the cuts to the beef price earlier this month, senior director with Meat Industry Ireland (MII) Cormac Healy denied that processors were “taking advantage” of the drought conditions.
Commenting on the situation, he said: “These trends are market-related and any suggestions that the recent price falls are due to processors taking advantage of drought conditions are simply wrong and unjustified.
“Everyone is acutely aware and understanding of the challenges at farm level at present, but laying the blame at the processors’ door is misguided.”