Meat factories will have to insist on guaranteed prices from their retail and wholesale customers into the medium to long-term.
That is according to the ICSA’s beef chair, Edmund Graham, who stated that farmers “cannot be expected to carry all the risk on their now”.
He stated that with current prices and high uncertainty around even the availability of product, “beef finishers would be insane to make any plans to finish cattle”.
“Factories cannot expect that they can keep beef price for next spring a complete mystery and hope that it will be all right on the day.”
“It won’t. Right now farmers need some commitment to prices well in excess of current beef prices.”
Costs and uncertainty around markets
He said there is “no way” that farmers can plan for winter finishing now, given the “ferocious” rise in costs and the uncertainty around markets.
“There will be very little cattle fattened next winter given current realities.”
“Factories need to change their normal way of doing business and plan to offer contracts now for cattle for next spring at prices that reflect the current huge costs.”
“There will be no beef in the shops next spring without dramatic change in pricing and guarantees,” he warned.
The ICSA has received reports that millers will prioritise pig and poultry over cattle rations if there is any scarcity later this year.
Therefore, he said beef farmers are at “the bottom of the heap” in terms of priorities.
Graham added that winter finishers need to know now whether they have any business growing grass or maize silage.
He stated that both are “just too costly” to grow for an enterprise that, at the best of times, “is a gamble”.
Updated costings on beef finishing
Furthermore, ICSA also called on Teagasc to provide regularly updated costings on beef finishing to take account of input price escalation.
“The word must get out to retailers now that a completely revamped pricing structure for beef farmers is required if they want beef or any other meat for that matter,” Graham concluded.