ICMSA Livestock Chairperson welcomes optimism and price rise in the beef trade.

The Chairperson of ICMSA Livestock Committee, Mr. Michael O’ Connell, has said that there is a sense of optimism amongst farmers with the current state of the beef trade, with quotes moving to 520/525 c/kg for steers and 525/530 c/kg for heifers.   Rises in quotes has been well received but the reality is that we are still a long way behind our UK counterparts as the gap in price for the equivalent R3 steer has widened to 56c/kg between Ireland and the UK.   As the UK is our biggest customer with 47% of our processed beef exported there in 2023, the margin being made on Irish beef in the UK by someone along the supply chain is very substantial and is at the expense of hard pressed Irish beef producers.

The reliance and control, Mr. O’Connell said, from a processor point of view on Feedlot customers or in DAFM terminology ‘CFU (Controlled Finishing Units)’ has become more evident with 25% of this year’s throughput being attributed to these suppliers.   A number of weeks ago, factories strategically undermined farmer finishers by cutting the price of prime cattle in a bid to ‘flush out’ shed cattle and this showed really how factories continue to undermine their loyal supply base.   This was an absolute insult following on from disastrous winter and spring weatherwise, huge costs at farm level associated with a late spring and record prices of forward and store cattle in the autumn of 2023 for finishing in the first half of 2024.

Throughput has since fallen over the last number of weeks, Mr. O’Connell said, although year to date, the number of cattle killed is up by over 30,000 head compared to the same period last year which is a positive looking forward.   Taking this into account, along with Bord Bia’s prediction of 40,000 less cattle in the system for slaughter in 2024, this should mean that there will be about 70,000 less cattle available for slaughter for the remaining 29 weeks of 2024 which should provide farmers with greater bargaining power.

At present, Mr. O’Connell said, that factory agents are battling it out ringside for forward and finished beef cattle at present which has seen heavy continental steers and heifers making well over €3/kg liveweight in sales around the country regardless of age or Quality Assurance.   ‘Taking todays factory prices into account, this shows that factories are underpaying for cattle sold direct to meat plants who are meeting the requirements for residency for supermarkets but are getting paid less.   It leaves a lot of questions to be answered, quality assurance and residency have gone out the window by the looks of it.’ according to O’ Connell.

The ball, Mr. O’Connell said, is in the farmers court now, we have the cattle, all the factories need is the right money.   I am again encouraging farmers to study their options with their finished cattle whether it be mart or factory.   Loyalty to a processor is gone out the window after the charade of price cuts a few weeks ago and with this in mind, farmers should not take the first price offered to them by an agent after being told the age old yarn of, ‘it’s a good price, I wouldn’t be giving it to anyone else or tomorrow is the only day I can give you that price for’’.   The pressure is off farmers with the improvement in the weather and majority of silage cut but it has increased the pressure on the processors and farmers should stand their ground in the coming weeks on beef prices, concluded Mr. O’Connell.

ENDS  12^th June 2024

Michael O’Connell is at (086) 8551015.

ICMSA Head Office (061) 314677.