Michael Guinan, Chairperson of ICMSA’s Livestock Committee said that the only possible explanation is that Irish processors and retailers are grabbing more of Irish farmers’ margins than their UK counterparts are taking from UK farmers.
“Over the last few weeks, beef prices in the UK – our major market for beef – have begun to strengthen. In June the average differential for heifers was 40 cents per kg and this has now risen to 56 cents per kg in August. A similar trend is apparent in steer beef with the differential rising from 44 cents to 59 cents per kg in that time. Cumulatively, applying these price differentials to all heifers and steers slaughtered in Ireland during this three month period, the total cost of the price gap to Irish beef farmers is over €9m with €6m of this coming on the steer side,” he said.
The reality for farmers, he said, is that these differentials signify the difference between making an income in 2014 from cattle-rearing and making the kind of financial loss that will inevitably lead to long-term consequences for the Irish beef sector. “We only have to look at Suckler sales at present to see where this could go and dairy farmers will take breeding decisions with an even lower emphasis on beef traits unless they can be convinced to do otherwise.”
The ICMSA man said that recent reports from the UK shows that Irish exports have declined considerably in the month of June (down 3% compared to an average increase close to 15% for the previous three months) but Mr Guinan noted that a range of markets had taken increased volumes of Irish product in that same month. Given that Irish beef supplies are over 100,000 head over 2013 levels at present, this would suggest that Irish beef processors have been able to find other markets for Irish beef offering better returns than the UK market leaving us asking why Irish farmers not seen the benefit of these returns.
“It is perfectly obvious that squeeze being inflicted by the processors and retailers on their farmer-suppliers is actually getting worse and the Minister has a clear responsibility to address this continuing market-manipulation and margin-stripping,” the ICMSA Livestock Committee Chairman said.