Ireland-Beef Farmers nervous of future.

IRELAND-CONCERNS IN CATTLE INDUSTRY.

Winter finishers face losses of over €250 per finished animal, should meat factories force through the latest round of beef price cuts. Despite already lagging well behind prices on offer across Europe, Irish factories have this week attempted to pull prices by 3-6c/kg, and are now trying to buy steers from a base price of 308-316c/kg for R grades. Figures produced by Teagasc last autumn showed that for the efficient finisher to gain a margin of just €50 per head, a Spring beef price of 390-406c/kg was required. With quotes now running some 70-90c/kg below the Teagasc figures, farmers currently selling stock are incurring massive losses.

Finishers believe factories have adopted a policy of pulling the base price paid for ’farmers cattle’ in a bid to subsidise both the forward contract prices offered to the larger finishers and the factory feedlots. Irrespective of the legitimacy of this argument, it now looks certain that many of the smaller operators who are not only being forced to accept the lower beef prices, but have also had to pay artificially inflated meal prices throughout the winter, will be forced to exit the business.

IFA National Livestock Committee chairman, Michael Doran, said winter finishers are furious with the factories over the way they have attempted to manipulate a pull in quoted beef prices this week.

Doran said the price cuts will drive finishers out of business. He said: "At prices of €3.19/kg to €3.36/kg, finishers were struggling to cover costs and breakeven. Any move by the factories to drive down prices will compound the losses for winter finishers and bankrupt many efficient operators.’’

It is difficult to see any justification for the latest round of price cuts. British market prices this week have increased significantly due to tight supplies. With demand strong and supplies extremely tight, the general run of cattle in Britain are being bought at 288-292p/kg (344-349c/kg inc VAT), or the equivalent of €100 to €120 per head above the average price paid in Ireland.

While Irish factories are citing an increase in the volume of cattle coming on stream, figure one shows that the kill so far this year is currently running 20,000 head behind the same period last year and over 45,000 head behind 2007 figures.