Factories have been warned that a reluctance to pay farmers breakeven prices in the first half of 2023 could result in a shortage of prime beef, as finishers opt to keep cattle until the spring.
Chair of the Irish Creamery Milk Suppliers’ Association (ICMSA) livestock committee Des Morrison, said that factories must recognise the margin pressures that finishers are under and that €6/kg is now the breakeven minimum.
Their reluctance to do so “is going to translate into a decision on the farmers’ part to finish their cattle on grass later in the spring”, he said.
“This is going to mean a shortage of prime beef going into factories and much more competition amongst beef processors for available throughput.
Patrocinadores
“We have been here before where the factories end up being too grasping for their own good.
“They could have paid a price that covered the feed and other inputs required by winter finishers, but they tried to be smart and short-change them,” said Morrison.
According to the chairman, many farmers decided to keep their cattle and finish them on grass later in the year as a result. He added that if this trend continues, it will mean a notable shortage of animals available, and factories will have to come out with a better price.
His comments come as factory quotes for the first week of 2023 opened today (Tuesday, January 3), with most factories offering a base price of €5/kg for bullocks, 75c more than the price offered on the same week last year.
Agriland also reported that relation to prime cattle, factory quotes for in-spec steers are ranging from €5/kg to €5.10/kg on the grid. Meanwhile, quotes for heifers this week are between €5/kg and €5.15/kg.
“It is vital that everyone realises that that €6/kg represents the minimum ‘breakeven’ and that there must be a decent profit margin on top of that figure.
“That can’t even be doubted. Winter finishers have not made a reasonable profit in years, and this cannot, and will not, continue indefinitely,” Morrison concluded.
