ICMSA describe as “scaremongering rubbish” warnings of post-Christmas trade ‘correction’ in beef price

While acknowledging the recent welcome increases in beef price, the Chairperson of ICMSA’s Livestock Committee, Michael O Connell, has derided as “rubbish” and “scaremongering” warnings from the beef processors that prices will be dropped immediately after the Christmas trade ‘Kill’ and we will head into the New Year in a ‘price correction/adjustment mode’.

“This is the usual attempt at manipulation and farmers just have to ‘call their bluff’ and look through the scaremongering to the figures”, said Mr. O’Connell.

“We are between 50c and 60c/kg ahead of where we were this time last year with all indications pointing towards less factory-fit cattle in the short-term. The factories are looking at that situation and trying to work out how they can get away with controlling the price. Hence these silly and transparent ‘warnings’ designed to prepare farmers for an attempt by the processors to drop price post-Christmas trade and into the New Year”, said Mr. O’Connell.

Pointing out that the increase in factory price has seen a simultaneous price rise in both forward store and finished cattle at mart level, Mr. O’Connell noted that the return for these cattle seems typically higher in the mart than the factory.

“Your typical R grade steer, 700kg with a kill out of 55% equating to a carcass weight of 385kg commanding a base price of €5.25c/kg while ticking all the boxes to get its QA Bonus by being u30 months, Quality Assured, 70+ days in the herd, less than 4 movements, is making a grand total of €2098. But the simple reality is that equivalent cattle are making €3.10/3.15c/kg liveweight in the mart. To put it quite simply, that’s €72 to €107 per head more in the mart. This shows the level of discontent and irritation felt by the processors: they are willing to give more than factory value in the mart to secure slaughter-fit cattle”, said the Livestock Committee Chairperson.

“As I have stated on a number of occasions, farmers should sell hard and don’t take the first price offered or listen to the yarn of ‘that’s a good price and it’s for tomorrow only’. The mart is a hugely promising option; processors are actively battling at ringside amongst each other, as well as feedlot buyers and Northern customers. We have seen 5 to 10c rises in cattle in the last fortnight and ICMSA thinks that it’s not finished. Factory procurement staff have admitted to operating day-to-day and notably falling short of the daily kill plan requirement. Base prices of €5.25/5.30c/kg for steers and €5.30/5.35 for heifers have been paid this week while flat price deals of up to €5.25c/kg for Friesian steers, €5.70c/kg for a mix of Hereford and angus steers and heifers are being reported”, he continued.

Mr. O’Connell said that a notable stat already evident this year was the fact that steers and heifers have reduced a further 6kg in carcass weight versus the overall carcass weight last year. He calculated that the decrease in carcass weight accounts for 5,950 tons of beef less slaughtered or available versus last year.

“Will the penny finally drop with processors regarding lighter carcasses? Regardless of the extra cattle they may have killed year to date, there is a huge drop off in carcass weight, equating to a huge tonnage of beef which is not available for sale. The extra numbers killed are not offsetting the loss in carcass weight”, he said.

Mr. O’Connell concluded by stating that there was still a way to go before we ‘caught up’ with our UK counterparts, pointing to a gap of over €1/kg that is still evident. But the demand for Irish cattle throughout Europe and other parts of the world is so strong that we have seen Irish cattle exports surpass 330,000 head year to date with a further 6 or 7 weeks left before year-end

“We are sure to see numbers hit record levels. Strong export markets in 2022 and 2023 are really hitting our beef processors in the pocket and that’s why they tried their old tactic of trying to ‘soften’ us up in preparation for a price cut that’s nowhere near justified by the facts and data. They’ll fail because they can’t deny the numbers and the markets.”

Ends      8 November 2024

Michael O’Connell, 086-8551015

Chairperson, ICMSA Livestock Committee

Or

Cathal MacCarthy, 087-6168758

ICMSA Press Office