Anger among beef finishers is mounting as the differential between British and Irish beef prices nears record levels.
With the factories continuing to drag down prices, Irish farmers are now receiving almost €300 per finisher steer less than their English counterparts.
IFA president John Bryan has described the differential as a 'scandal'. He accused factories of profiteering at the expense of farmers who are already under severe financial pressure due to extremely difficult weather conditions.
Over the past four weeks the value of a typical steer carcase in Ireland has fallen by €150 per head. However, over the same four-week period, beef prices in Britain, the main export market for Irish beef, have strengthened.
In recent days the retailer-owned processing group Woodheads has started to drive the English trade, paying up to £3.48/kg for R4L steers.
At current exchange rates, this equates to €4.69/kg or 83c/kg above the equivalent Irish price.
While Irish-owned processors operating in Britain are trying to resist the price increase, tight supplies have forced them to match and, on occasions, outbid the market leaders.
John Bryan said beef producers and IFA livestock representatives would be meeting factory managers this week to highlight their anger.
He said the IFA would be holding a special meeting of the livestock committee and executive council early next week to decide on the course of action farmers will take to defend their livelihoods in what has been one of the worst summers for weather and cattle performance.
Department of Agriculture figures clearly show that an increasing number of farmers are now looking to factories in Northern Ireland (NI) as a source of competition.
In NI, farmers are freely securing the equivalent of €4.32/kg for R grading steers. With a 42c/kg or €150 per head price premium on offer, the number of cattle crossing the border has been rising steadily in recent weeks.
Last week, 1,185 head were exported to NI for direct slaughter, the highest weekly figure recorded since February 2010.
The ease at which Irish factories have been able to act in unison in pulling prices has sent shock waves across the sector.
According to John Bryan, 'the actions of factories will only reinforce the view among farmers that feeding expensive cereals to cattle this winter is simply not worth the risk'.
Based on the rise in feed costs alone, farmers who opt to finish cattle out of sheds this coming winter will require an additional 20c/kg deadweight to simply maintain margins at last year's levels. According to Bryan, the short-term 'profiteering' by factories in recent weeks will have severe consequences for the long-term future of the sector.
He accused factories of undermining the government's Food Harvest 2020 targets and of derailing the potential of the sector to grow exports and secure additional employment.
He called on Minster for Agriculture Simon Coveney to redouble efforts to develop the live export market and increase competition in the sector.
The effect of the sharp price pull has also filtered into the financial sector. Securing funds to purchase stock has not been a major issue to date.
However, an increasing number of farmers are now reporting banks to be adopting an extremely cautious approach when granting stocking loans.
Source: Argentine Beef Packers S.A.
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