THE ICMSA has said conventional beef factories could learn from the transparency of the organic beef sector when it comes to pricing.
ICMSA Livestock Committee chair Michael O’Connell said that organic farmers have the option of signing up to a forward beef price contract, set out three to four months in advance.
‘Conventional beef finishers would love to see this implemented by processors as we are told on a regular basis that there is no such thing as a ‘contract’ in place for finishers or feedlots. A forward price agreement would take a certain amount of the risk out of finishing cattle and taking into account the trade for store and forward store cattle, something will have to change to take the risk out of this huge investment. We think this would go a long way towards that,’ said Mr O’Connell.
Mr O’Connell welcomed strong beef prices in recent weeks and believe it can help deliver realistic margins for farmers.
Base prices for steers and heifers have seen positive upward momentum since Christmas with €5.60c/kg base price freely available for both categories and more to be gained through a bit of negotiation.
Flat prices of up to €6.20c/kg is available for in-spec Angus cattle while Friesian steers have commanded up to €5.70c/kg.
The ICMSA reminded farmers selling beef cattle to know the value of their own stock and explore their options.
‘We have heard cases of farmers being offered a “this is just for tomorrow because of the weather” deal or being told “there’s plenty of cattle to come mid-January and I’ll get yours away before the trade settles” deal, but realistically factories are very set on sourcing cattle. We want farmers not to feel pressurised into slaughtering cattle if they are not satisfied with the price,’ Mr. O’Connell stressed.
‘The line had to be drawn somewhere; famers have done the sums and finishing cattle wasn’t adding up.
This is the reality behind the price of the R3 steer being approximately 70c/kg ahead of where it was this time last year despite being a further 99c/kg behind our UK counterparts. It amazes me to see how our UK counterparts are so far ahead of us in terms of beef price when we export roughly 45% of our beef to them – a fact that is not being reflected in our market returns here,’ said Mr. O’Connell.
