The news of Kildare Chilling being taken over by Dawn Meats, as reported last week, was a further blow at an already worrying time for sheep producers.
The night before the news, a National Sheep Meeting held by the Irish Farmers’ Association (IFA) took place to highlight the struggles farmers are facing and the “crisis” the sector was in.
The news of the takeover the following day was the last thing sheep farmers wanted to hear, at a time when some brim of hope had appeared with the rise of hogget prices, after 50c/kg had been wiped out in the previous weeks.
Why is it such concerning news? Firstly, we all know that the more competition there is for a product (in this case sheepmeat), then it helps to create further demand among those involved in the processing of sheep, which ultimately improves prices.
If the acquisition goes through, it leaves three major factories to process sheepmeat in Ireland – Dawn Meats, Irish Country Meats (two plants) and Kepak Athleague being the main players.
The night of IFA meeting, the gathering heard from farmers in the audience who called for greater competition.
A second concern is that meat processing plants have become, more often than not, keen to not disclose what they are quoting, whether that relates to lambs or ewes.
Dawn Meats often falls into that category, whereas Kildare Chilling, along with Irish Country Meats apart from the odd exception, always disclose what they are offering throughout a given week for lambs and ewes.
So, the concern for sheep producers going forward is that if the takeover does take place, assuming it passes all the necessary statutory checks, that a factory which frequently appears on the quotes table will be no longer display or reveal what it is quoting, further keeping producers in the dark regarding prices.
Furthermore, Kildare Chilling has always been the one to catch in terms of what it offers, particularly for lambs.
For the majority of the year, Kildare Chilling leads the line with the highest base quote for lambs.
This means that other competitors are chasing it [Kildare Chilling’s price] and it often forces competitors to offer more than what they are actually quoting.
It helps to keep extra pressure on the competition and for producers, most importantly, aiding their pockets.
Worrying and unknown times lie ahead with this deal, which had been mooted for some time, but the timing of it could not have been worse for the sheep sector in this country.