“Cattle will be much scarcer for the first six months. Already there are signs of cow price hardening which is always a positive sign for finishers. This won’t happen however, while people continue to sell prime beef at €3.90/kg. Farmers need to get tough and fast, in the coming weeks when beef will be scarce.”
However, Mr Phelan said that the longer run picture suggests price weakness towards the end of 2016. Apart from the extra calves born last year, there was also a significant fall in live exports of almost 60,000 head compared to 2014.
“We need the Government to concentrate on doing everything possible to facilitate live exports in 2016. There is also an onus on farmers to re-evaluate what they are doing. Farmers who are keeping dairy calves at home instead of allowing them be exported to continental veal units need to look very carefully at the economics of what they are doing. Suckler farmers need to consider reducing cow numbers by at least 5%.
“In the bigger picture, the national strategy of expanding production is a disaster for farmers. Run faster to stand still. Farmers need to take a serious reality check about the economics of extra livestock whether on dairy or beef farms. It is clear that the beef sector here needs to contract rather than expand given that every time cattle numbers increase even slightly price drops below the cost of production.
“The time has come to look at the way in which supports are designed with a view to giving farmers real options. Agri-environment supports should include better support for alternative crops on a portion of the national land base which might also benefit climate change targets while facilitating the continuation of efficient grass based systems if, and only if, production remains profitable.
“Forestry supports need to be made more attractive and should apply over a much longer term as well. The bottom line is that to continue to produce as much beef as we do at a loss is insanity and it’s time for a national debate on this. Less can be more”, Mr Phelan said.
Mr Phelan also expressed concern at the increase in Polish imports to the UK.
“Farmers would not like to think that Irish beef factories could see this as a source of cheap cattle to drive down price for British or Irish farmers.”