At a time when Irish beef producers are under enormous financial pressure, it is totally unacceptable that the price differential between Irish and UK prices has actually increased since June with the differential now standing at €200 per head for the average steer, according to Mr. Michael Guinan, Chairperson of ICMSA’s Livestock Committee and this gap clearly shows that the margin is in the beef supply chain but it is obvious that the processors and retailers are sharing a bigger slice of the margin from Irish beef producers than their UK counterparts.
With prices beginning to strengthen in the UK in the last number of weeks which is our major market for beef, the average differential for heifers was 40 cents per kg in June and this has now risen to 56 cents per kg in August. A similar trend, Mr. Guinan said, has followed 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, Mr. Guinan said, that the total cost of the price gap to Irish beef farmers is over €9m with €6m of this coming on the steer side.
The reality for farmers is that these differentials represent the difference between making an income in 2014 from cattle rearing to making a financial loss and these financial losses will have long term implications for the Irish beef sector with one only having to look at Suckler sales at present and dairy farmers will take breeding decisions with an even lower emphasis on beef traits unless they can be convinced to do otherwise.
Indeed, Mr. Guinan 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), stating that a “range of markets took increased volumes of Irish product in that 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 making better returns than the UK market and thus, one would have to ask the question, why have Irish farmers not seen the benefit of these returns.
It is quite clear that the processors and retailers are squeezing farmers and the Minister has a clear responsibility to address this imbalance in the beef supply chain, concluded Mr. Guinan.
Ends 29 August 2014
Michael Guinan is at (086) 8766851.