‘Winter finishers have lost confidence in the trade’
Winter finishers have lost confidence in the beef trade and are slow to purchase store cattle, according to the ICSA’s Edmond Phelan.
Store cattle prices in marts have been under pressure, he said, and it is the first time in memory that prices have actually dropped during the same week as the Single Farm Payment or Basic Payment has been issued to farmers.
Speaking to Agriland, the ICSA Beef Chairman said that winter finishers confidence has been shaken by the lower prices currently being offered by processors around the country.
“It is the first time I can recall that store cattle prices in marts have fell in the same week that the Department of Agriculture has paid the Single Farm Payment,” he said.
Phelan said that beef finishers are coming under increasing pressure, and many are assessing their options before committing to purchase store cattle this winter.
Anger over beef price cuts
IFA President Joe Healy has said severe cuts in beef prices are imposing serious losses on cattle farmers and inflicting grave damage on the €2.5 billion livestock sector.
He warned that farmers cannot continue to produce beef at a loss.
The beef market and price chain is dysfunctional, he said, and the power of the retailers, with the collaboration of the factories, is forcing Irish beef prices into unsustainable loss levels.
The British retail price of beef has fallen from £7.05/kg in July 2015 to £6.85/kg in September 2016.
“If the market was working properly and the 14% devaluation applied, the average retail price would be about £7.80/kg,” he said.
The IFA leader added that British cattle prices have risen by 41p/kg or 13% since May, while Irish cattle prices have fallen from a base of 410c/kg in June (pre-Brexit) to 365c/kg – a reduction of 11%.
It is clear, he said, that powerful retailers and weak selling by the Irish factories are forcing Irish beef farmers to take the pain of Brexit, when the British retail price should be rising.
Healy also said the Minister Creed, Bord Bia and factories must demand real price increases from British retailers to reflect the devaluation of Sterling following the Brexit vote.
He also said there is growing frustration and anger among farmers on beef prices and he warned the factories that the price cuts must stop.
The severe cuts in beef prices have damaged store and weanling prices and seriously undermined confidence in the sector, he said.
October cattle supplies continue upward momentum
There has been a significant upturn in cattle throughput in recent weeks, according to Meat Industry Ireland’s Cormac Healy.
In a statement to Agriland, Healy said for the year-to-date, the national kill is up 55,000 head or 4.5%, and Bord Bia forecasts suggest that the overall kill for the year will be up in excess of 60,000 head.
“This certainly looks like it will be achieved and exceeded.
The last five weeks have seen an extra 22,000 head processed compared to the same period last year, which on average is 4,400 additional cattle per week.
“Given the Bord Bia forecasts from earlier in the year, additional supplies had been anticipated and processors would have been talking to customers across markets about potential volumes and trying to plan accordingly,” he said.
Healy said that the extra beef volume coming on stream will be spread across existing European markets predominantly.
“The UK is obviously more challenging due to the collapse of sterling.
“Greater volumes are also going to markets such as the Philippines, particularly forequarter and manufacturing product and there is some increase, though very modest, to the USA,” he said.
He also said that it is not so much the additional supply that is most challenging but more so the impact of Sterling devaluation and the slow recovery in consumption levels in very competitively priced Continental markets.