Noting that the Irish beef market was now quickly sliding into what he called “a rigged game”, the chairperson of ICMSA’s Livestock Committee, Michael O’Connell, described this week’s fall in prices paid by the factories as deliberate, targeted and geographic.
“We note that the increased number of forward and beef cattle in certain marts this week and we also note that they were bought by factories or feedlots for either direct slaughter or short-term feeding. We think that there’s a very calculated policy here of trying to control numbers as well as keeping up the prices paid in Midlands and Nort-Western regions while systematically cutting prices to the more Southern farmers.
“The calculation seems to be that the more chance the farmers have of sending their cattle over the border, the higher the price the factories will offer with those prices subsidised by cutting the prices in Munster where the farmers might baulk at the costs of sending their cattle north,” said Mr O’Connell.
Observing that live exports to the North are up by 37% year to date, Mr O’Connell said that the factories are trying to offset the ‘Northern’ option by exerting even more control on supply and throughput through the use of feedlots or ‘Controlled Finishing Units’ (CFUs) as they are now described.
“We see now that 25% of the beef kill is coming from these feedlots and real bottom line here is that this represents the last piece in the total takeover of the Irish beef sector by the factories. The idea that we have a normal supply-and-demand operation in the Irish beef sector is just a illusion. The rise and rise of the feedlots owned by the factories is taking the last bit of farmer choice out of the market and means that the factories now have complete control,” said Mr O’Connell.
Calling for the Agri Food Regulator to immediately launch an investigation into this two-tier pricing model and ‘rigged’ supply-and-demand situation, Mr O’Connell said that farmers must look at marts as an increasingly better option.
“Marts remain the most lucrative option but at factory level, flat prices are available for in-spec Hereford, Angus and Friesian cattle with up to 530c/kg being paid for mixed lots of steers and heifers. The kill at present is all shed cattle and the late spring has seen cattle turned out to grass up to six weeks later than usual. That means that grass cattle are still up to two months away. The factories know there is pressure coming and they are going to try and artificially ‘drop’ the price before they have to raise it in the gap between shed and grass,” he said.
