Feb 272015

Irish beef finishers are losing over €300 on each R3 steer they produce compared to their UK counterparts and that margin is fuelling suspicions of who is gaining from this very substantial price differential, according to Mr. Michael Guinan, Chairperson of ICMSA’s Livestock Committee.

According to Bord Bia figures, Mr. Guinan noted that the R3 price for steers in Ireland is 86.9 cents per kg below the price in the UK.   On the average 350kg steer carcase, this represents a loss of €304 per head for farmers.   This difference amounts to a 21% difference between the two markets, a trend that has been constant for the last number of months.   At present, farmers feel that there are being short changed on the price of their cattle and looking at the difference between the two market.   Mr. Guinan said that if he had sold one 350 kg R3 steer each week since the start of 2014, he would be almost €15,000 euro worse off compared to his UK counterpart which is a staggering amount and amounts to the profit on most beef operations in a year.

The ICMSA Livestock Chairperson emphasised that this trend is not only confined to R3 steers but extends to U and O grades also.   How can it be that there was only 20 cent per kg difference between 03 steers at the end of May 2014 and this has risen to 72 cents – a staggering 3.5 fold increase in 8 months?   The exchange rate with sterling has definitely benefited the factories and these additional returns should be shared with the farmer.   If we are supplying over 50% of our exports to one market – the UK – the exchange rate has turned decisively in our favour, but that’s not being reflected in farmers’ pockets.   The question needs to asked: are we seeing yet again the links further up the chain gaining margin at the expense of farmers because the fundamentals of the markets point to much higher prices for farmers, said Mr Guinan.

He concluded by striking a note of caution for beef farmers.   In the first six weeks of 2015, only 1,846 calves have been exported which represents a fall from 4,325 in the same time last year.   While this may not seem like too much of a worry, we should note that total calve births are up close to 25% in 2015 year to date according to the latest figures from the ICBF.   The meat plants will have plentiful stock in two years time and farmers must realise that this extra supply will cause lower prices down the line.   We need a major push to export live calves, concluded Mr. Guinan.

ENDS.   27 February 2015

Michael Guinan is at (086) 8766851.