Meat processors are “losing their grip on beef prices” as tight supplies and strong market demand are driving the trade at the moment, according to the Irish Farmers’ Association (IFA).
According to Brendan Golden, the association’s livestock chairperson, some processors attempted to hold back on prices last week, a move he said “backfired”, with prices moving on this week.
“Factories are having to pay 10c/kg above quotes to secure enough cattle this week as farmers rightly dig in and demand stronger returns from the market place,” he said.
Despite quotes for steers starting at €5.20/kg, up to €5.30/kg is on offer, while heifers are quoted at €5.25/kg although deals to €5.35/kg and €5.40/kg are on the table, Golden said.
The IFA Livestock chair said that cow prices, meanwhile, are ranging from €4.50/kg to €5.00/kg, with young bulls making €5.20/kg to €5.60/kg.
“Beef prices still have a journey to travel to reflect the production costs on farms over the winter months,” he said.
He added: “The increased access to the lucrative Chinese market provides a real opportunity which must be grasped by factories and Bord Bia.”
He said the target for beef prices, as set out by Teagasc on winter finishing budgets, must be to bring prices to €6.00/kg to cover costs on beef farms.
“The current R3 steer price is €5.53/kg based on the latest Department of Agriculture, Food and the Marine reported prices, which clearly shows the gap factories must close on beef price,” Golden commented.
He added: “Supplies are projected to tighten further over the coming weeks and months.”
The IFA Livestock chair called on farmers to “dig in and sell hard”.
“Factories need the cattle and they must reflect the realities of costs on our farms in higher beef prices,” Golden added.
The Irish Cattle and Sheep Farmers’ Association (ICSA) is also calling on farmers to reject low quotes from processors.
Edmund Graham, the ICSA’s beef chairperson, said he is aware that there are factories which are “doing deals” but also some that are currently “pulling the prices to gain control”.
“My advice to farmers is don’t take the first price you can get – there could be a difference of 10c to 15c between different factories,” Graham said.
“We know there are some factories which are quoting low prices – as low as €5.15/kg for steers and €5.20/kg for heifers but they’re not really getting away with it. However, at the same time, there are also factories which are giving farmers considerably more for their cattle,” he added.