The decline in farmgate beef prices is putting the agricultural industry, which is a “major contributor” to the Northern Ireland (NI) economy, at risk, according to the Ulster Farmers’ Union (UFU).
Its beef and lamb chairman, Sam Chesney, has outlined that beef prices must strengthen, as farmers finishing cattle continue to suffer “heavy losses”.
He noted that prices for R-3 steers have slumped from 346p/kg this time last year to 336p/kg, stressing that neither of these prices offer a “sound foundation” for a sustainable beef industry.
“Producers have faced downward price pressure in recent months. It is now at a point where some are seriously considering the future of their family-run businesses.”
“Poor prices are undermining incomes at a time of year when costs are high. Winter finishing rations have increased from around £210 to £225/per tonne and fuel and fertiliser prices still remain high.”
“Farmers simply cannot afford to live with beef prices below the cost of production,” he added.
Loss of over £36m
The farm organisation highlighted that the losses are unsustainable. The average cattle and sheep lowland farm income for 2018/2019 was £12,274 and this, it warned, will fall again when figures for the current year are published.
“The beef industry has lost over £36million from November 2018 to October 2019 and with poor prices and rising production costs, this is getting worse.”
Chesney said all producers must negotiate “hard” for better prices. “Farmers must be aware of additional deductions and penalties that have been put in place by processors for livestock being overweight.” “Every farmer needs to know their own cost of production if they are to make changes on their farms.”
“But for now, they need to book cattle in advance and ensure they shop around for the best deal. The live market is strong, so it makes sense to see this as an option when selling stock,” he added.
Uncertain political and economic times
Mr Chesney continued stating that in uncertain political and economic times, it made sense for farmers and processors to work together to ensure the beef industry has a future.
“We have a world-class food industry and farm to the highest animal welfare and environmental standards.”
“That merits a fair and sustainable price to keep both farmers and processors in business. That is not happening, and the problem is getting worse.”
He revealed that one of the key focuses for the UFU beef and lamb committee will be on future support as “Northern Ireland now has some flexibility to design its own future domestic agriculture policy”.
“However, we must be mindful of World Trade Organisation (WTO) commitments, state aid rules and the latest guidelines contained within the new protocol on Ireland/Northern Ireland that the UK Government and EU have signed up to,” concluded the beef and lamb chairman.