ICSA beef chair, Edmund Graham, has stressed that “spiralling” input costs mean factories will have to move beef prices to €5.00/kg “quickly”.
He said that prices for key inputs involved in beef production are “going through the roof and showing no signs of easing up”.
“Processors and retailers need to face this reality. That means by early 2022, factory prices will have to be at least €5.00/kg. Retailers will need to reflect this also.”
“Pressure from increased costs is coming from every angle. With the cost of fertiliser predicted to double, and fuel and feed prices going up and up, the only chance we have is for prices to increase in line with these increased input costs.”
“Teagasc have said winter finishers will need over €5/kg to secure some margin of a profit come the spring.”
“I would argue that even at €5/kg, we will be lucky to break even given the alarming rate at which our costs are rising. Indeed, the Teagasc costings factored in finisher ration meal at €300/t. However, more recent quotes suggest prices of around €327/t and rising.”
Beef price of €5.00/kg
He pointed out that beef prices in the UK are “still significantly higher” than here in the Republic.
Currently, he added, the price differential stands at €0.70c/kg, and this gap has been widening since July.
“It is becoming more and more unrealistic to expect beef finishers to feed cattle from mid-November onwards unless this unjustifiable price gap is closed, and prices here move to the €5/kg plus mark.”
Bull beef finishers will need up to €5.41/kg to break even – Teagasc
Bull beef finishers will require a price of more than €5.00/kg to break even in 2022.
That is according to Teagasc, which has published a series of budgets covering four types of production systems.
Its bull beef system budget looked at purchasing a 320-420kg weanling and finishing these in 6-months of 8-months.
Teagasc outlined that this system is high-risk and sensitive to buying and selling price and performance.
It advises farmers to secure market outlets for bulls before commencing this system.