Confidence among farmers in marts is very low at present, according to CEO of Kilkenny Mart Michael Lynch.

Speaking to presenter Claire Mc Cormack on the latest episode of FarmLand, Lynch said that uncertainty with low beef prices and Brexit looming means confidence is low ringside.

Irish Cattle and Sheep Farmers’ Association (ICSA) general secretary Eddie Punch was also on the show to discuss issues with the country’s beef factories.

Towards the end of last week, beef processors opted to knock another 5c/kg off prime cattle base quotes. Where 375c/kg was available for bullocks in the early days of last week, factories have now lowered this to 370c/kg.

In addition, the factories are operating off base quotes of 380c/kg for factory-fit heifers. This additional 5c/kg drop in base quotes leaves farmers with little or no profit margin.

Rising meal costs and fodder shortages are also hanging over farmers’ heads.

According to the Interagency Fodder Committee latest fodder census the latest national fodder deficit currently stands at three million tonnes.

‘Challenging situation’

Commenting on trends noticed ringside, Lynch highlighted that younger store cattle are bearing the brunt of current conditions.

“The heavier stock, factory-fit stock are stable – not as good as last year but they’re stable; there is an interest in those.

It’s the cattle that are 350-400kg, longer term cattle; people are scared, they can’t look too much forward – the fodder is feeding into that – they are a very challenging situation for those at the moment.

“I’d say confidence at the moment is very low,” Lynch said, adding that uncertainty always creates a low-confidence factor.

“Things like Brexit and where that’s going to go makes people very, very cautious – and that affects the mart trade, particularly for the cattle that they might be purchasing for 12 months’ time.”

The CEO added that, when one looks that far ahead and sees all the uncertainties there, this is having a major effect around the ring at present.

It is not all doom and gloom however, as Lynch was quick to point out.

“Farmers are optimistic; if they get a little bit of confidence, that helps.

They need confidence from the factories’ side to increase the price to give them a feeling that it’s worth investing in purchasing cattle again.

“Even in the last week on the fodder situation as I came up the road today, you’d see lots of people at silage. Reports are that’s better than anticipated so things like that help.”

Lynch noted that a little bit of confidence helps a lot; but confidence levels would certainly be challenged among farmers at present.

No current competition

“There isn’t competition there at the moment; those situations have meant that exporters are not really that active at the moment, and particularly in the west where the weanling sales are probably more prominent at this stage.

“It’s more farmers that are buying than exporters at this stage and that is not a help to the price as well.

For the really good stock there is a certain market for those, but with the Turkish situation, and even Spain and Italy are not that enthusiastic at the moment.

“That is a challenge at the moment and certainly it wouldn’t really have kicked off to any level compared to other years at this point in time.”