ICSA AMAZEMENT AT TESCO WASHING THEIR HANDS OF BELOW COST PRICES PAID TO FARMERS

9 DECEMBER 2019

ICSA president Edmond Phelan has expressed amazement at the statement made by TESCO in response to the IFA protest at its distribution centre in which it claims that the price paid by consumers in their shops is unrelated to the price paid to the primary producer.

“TESCO and other retailers cannot wash their hands of the issue of farmers being forced to work for less than the cost of production. The additional statement that TESCO pays for any promotions is particularly of interest given that the ICSA heifer experiment suggests that retailers and processors share a mark-up before costs of some €1,500 for a heifer that was bought from the farmer at little over €1,200, where that beef is sold at non-discounted price.”

“For many years retailers have supported fair trade coffee but it is shocking that they don’t give a damn about primary producers of beef on their own doorstep. The relentless focus on driving down price is part of the problem, but it is also the insistence that farmers are entitled to less than half the retail price after a process of breeding and feeding that takes three years. Then within three weeks, the processors carve up the majority of the value of the animal for themselves.”

“It is simply not good enough that retailers who have enormous influence on the food chain can try to dodge their responsibilities. ICSA believes that the low prices in 2019 are a reflection of aggressive procurement policies by both retailers and processors which are pushing farmers to the brink of bankruptcy and many farmers in meat production are in a state of despair.”

“Meanwhile, TESCO cannot ague that it needs to squeeze ever more money out of farmers. The third biggest supermarket chain in the world has posted global profits of over €2.5 billion and has total revenues in Ireland of some €2.6 billion. Farmers are supplying beef to help multinational retailers at a massive loss, and this cannot continue.”

“It is now time for beef price to move above €4/kg in order to prevent any further haemorrhaging of money by Irish beef farmers. Supermarkets who sell Irish beef at current farm-gate price are not supporting farmers, they are exploiting them,” concluded Mr Phelan.

ENDS

GLOBAL TRENDS NOT BEING REFLECTED HERE AS SHEEP FARMERS CONTINUE TO BE RIPPED OFF

9 DECEMBER 2019

ICSA sheep chair Sean McNamara has said it is stunning that Irish lamb producers are getting almost 70c/kg less than New Zealand producers, even though we have open access to the EU market and have less transport costs than them. “Our sheep farmers are getting ripped off. When ICSA held protests during the summer outside sheepmeat plants, factory bosses told us that markets for sheepmeat were bad. Amazingly now, markets seem to be booming for everybody else.”

“It’s not just the New Zealanders who are ahead of us. According to Bord Bia, UK producers are getting paid around 35c/kg more and in Spain it’s over €1.20/kg more. Much like in the beef sector, it is extremely frustrating that upward trends in global markets are not being properly reflected here. Although Irish prices have picked up in recent weeks, we are doing very poorly at a time when meat prices are powering ahead internationally, helped by demand from China for animal protein.”

Figures from Bord Bia also indicate that prices have remained practically stagnant for the last ten years. “Year after year, our costs are going up so, year after year, sheep farmers are taking more of a hit. We are being ripped off time and time again and it’s becoming increasingly difficult to see how many of us are going to be able to stay going. All we want is a fair price for our produce.”

ENDS

5 CENT A DERISORY OFFER

6 DECEMBER 2019

ICSA beef chair Edmund Graham has said a beef price increase of just 5c is a derisory offer that won’t quell farmer frustration with the current state of beef prices. “The proposed level of this increase by ABP is way below what’s needed. It appears the meat industry is hell bent on dragging out any meaningful price increases for as long as possible.”

“ABP were already back by 5c on the other processors with base prices of just €3.45 for both heifers and steers this week. At that rate, the bulk of any price increase will just go towards getting back on the same low level as the others.”

“The indicators all show that there is no reason why beef price should remain stuck at €3.50/kg or below when markets all over the globe are taking off. We need to see real movement to get our beef prices off the floor if the sector is to have any hope, and time is running out” he said.

ENDS

SHEEP PRICES STILL BELOW THE COST OF PRODUCTION DESPITE RECENT INCREASES

6 DECEMBER 2019

ICSA sheep chair Sean McNamara has said sheep farmers are still getting paid below the cost of production despite recent increases. “We need to be getting €5.50 at the very minimum, just to cover our costs.”

“At the end of a bad year, processors need to get real and pay a fair price. We can’t keep going producing at below the cost of production. The figures just don’t stack up.”

Mr McNamara said that the African Swine Fever crisis meant there was huge demand for animal protein in China and that this should be helping prices. “The impact on global pork prices along with the fact that sheepmeat plants in Ireland are now China approved suggests there is plenty of scope to increase sheep prices both in the short-term and into 2020.”

Mr McNamara also said Minister Creed must make a commitment to continue to supporting sheep farmers through the Sheep Welfare Scheme. “The scheme needs to be extended beyond next year and must deliver a significantly higher payment. Higher rates of payment can be facilitated through a bolt-on mechanism to the scheme, which would see sheep farmers rewarded for undertaking additional tasks.” he said

Mr McNamara argues the precedent has been set for this under the Beef Data & Genomics Programme (BDGP) with the addition of the Beef Environmental Efficiency Pilot (BEEP) scheme. “A similar bolt-on action or menu of actions under the Sheep Welfare Scheme would work just as well and deliver more benefits to the sheep sector as a whole.”

ICSA has also called for a BEAM type scheme for sheep farmers, “We have sold fit lambs at below the cost of below the cost of production all year. It’s not just the beef sector that has been badly affected Brexit uncertainty; sheep farmers have been badly hit too and deserve the same compensation measures,” Mr McNamara said.

ENDS

SUPERMARKETS MUST INSIST ON A FAIR PRICE TO PRODUCERS

5 DECEMBER 2019

 ICSA beef chairman Edmund Graham has said that supermarkets cannot ignore their responsibilities for the low beef price. “Supermarkets cannot continue to profit on the back of low prices. While a lot of retailers like to boast about supporting Irish farmers, the reality is they are exploiting them if they are buying at below the cost of production. It is now time to call out the ethics of selling beef while farmers lose their shirt. All retailers need to insist that they only sell products that have been bought for a fair price for the primary producer. A fair price is far more than €3.50/kg.”

“ICSA met with senior representatives from ALDI in September where we robustly outlined the losses faced by farmers, and they committed to engaging with the Beef Taskforce. However, this issue is not just about one retailer; it is about all multinational retailers operating in all the main EU markets. Retailers know well that their aggressive price cutting strategies are having horrendous impact on the viability of farmers all across Europe. Beef and sheep farmers are hit particularly hard and the level of depression and frustration among farm families is palpable.”

“Some retailers love to boast about fair trade coffee. It is a shame that they don’t have the same sense of guilt about what their market power and pricing is doing to farmers in Europe.”

“It is manifestly clear that there is no reason why beef price should remain stuck at €3.50/kg when markets all over the globe are taking off, partly driven by the massive deficit in pork in China arising from African Swine Fever. The Bord Bia Beef Market Price Index shows clearly that Irish prices should be rising. Meanwhile, ICSA research into retail values of beef show that retailers and processors can share €1,512 mark-up before costs on a heifer for which the farmer got paid €1,228.

“ICSA raised the issue of the need for more transparency around who makes what from the food chain at the Global Food Forum in Brussels this week. It is not acceptable that so little is known about who makes what from the food chain after product leaves the farm. There has to be transparency in the food chain and this will have to be sorted at national and EU level.”

“However, it is a matter of corporate social responsibility and ethics to return a fair price to producers and it is clear this is not happening at the moment.”

ENDS

MOMENTUM FOR PRICE INCREASE BECOMING IRRESISTIBLE

3 DECEMBER 2019

ICSA president Edmond Phelan has said momentum is shifting towards a beef price increase in the wake of today’s Beef Markets Taskforce meeting. Mr Phelan said, “The pressure on processors to move on price is unrelenting and justifiably so. Farmers who are not under pressure because of age limits should be holding out for a price rise as it is unlikely this pressure can be withstood.”

Continuing Mr Phelan said, “Pushing for an immediate price increase was top of the agenda for ICSA today. Prices are way back from where they should be and there is no justification for it. Irish prices are back on UK prices and back on EU prices and are now even on a par with Brazilian prices. Bord Bia’s Beef Price index clearly shows UK and EU prices are on an upward curve whereas our prices have flatlined at best. This is totally unacceptable. There is also a massive Chinese demand for animal protein as a consequence of African Swine Fever (ASF). We know global demand is pushing prices in a positive direction and Irish farmers will not sit back and accept crumbs from the table.”

At today’s meeting ICSA also called for a new BEAM scheme to be introduced for beef farmers, “Lessons must be learned from the first incarnation of this scheme and we must ensure the entirety of the funds allocated are channelled to where they need to go in future.”

Mr Phelan stressed the importance of the live export market and said, “No roadblocks should be allowed to hinder this vital outlet to farmers.”

ENDS

ICSA MEAT YIELD TRIAL SHOWS LOTS OF ADDED VALUE IN HEIFERS

 3 DECEMBER 2019

ICSA beef chairman Edmund Graham has suggested that following an ICSA trial, the association believes that processors and retailers are making substantial mark-ups on heifers destined for the supermarket shelf.

In some cases however, aggressive discounting by big retailers is used as a means of getting consumers in to buy other products. When this happens, the farmer is essentially subsidising other over-priced goods in the supermarket.

The second key finding is that higher grade suckler type animals are yielding a lot of added value through higher meat yield which is not reflected in the beef grid payment system.

The ICSA trial showed that an O= animal (dairy cross) under 30 months was priced at €1,043 (VAT exclusive) and its meat could fetch €2,217 in the supermarket, a mark-up before costs of €1,174.

The R+ grade suckler animal, under 30 months, was priced at €1,228 (VAT exclusive) and its meat was priced at €2,741, a mark-up before costs of €1,512.

The trial was conducted taking two heifers from the farm of Mr Dan Lynam in Westmeath who were weighed live, slaughtered and hung for 28 days. The meat from both was then carefully weighed, category by category, and then priced according to a range of prices available in the main retail outlets.

While the trial has the obvious limitation of being based on just two animals, the outcomes point the way for further research and investigation. Edmond Graham says that this information will inform the ICSA approach at the Beef Markets Taskforce, particularly in relation to the Teagasc review of the grid and the independent study into price composition.

One heifer was a Limousin suckler type heifer which was assessed as R+ and the second heifer was an Angus dairy cross heifer assessed as O=. The method was to weigh every cut and price it in all the main supermarkets. There is a lot of variation in pricing not only between supermarket chains but within supermarkets. However, this points to the need for a debate about the sustainability of pricing policy.

“We have tried to exclude very high prices which are not reflective. For example, we have taken a price of €28.73 for fillet steak even though we have seen it priced at €37.50.  But on the other hand, some supermarkets are selling beef under special offers without any regard for the fact that you cannot feed two animals for the price of one or decide that this month I am going to cut my heifers’ feed by 33%.”

“A farmer might get €1,100 for an animal that has taken over three years to bring from breeding to slaughter whereas processors and retailers expect to make more than that for processing the animal and putting it on shelf, a process which takes three weeks.”

“In addition, meat processors make significant earnings from the fifth quarter which the farmer doesn’t get paid for. In 2018, beef offal was worth €385 million which works out at just over €200/ animal.”

The story gets worse when you consider that this animal will have cost €1300 to bring to slaughter and the farmer will be expected to have levels of traceability seen nowhere else in the world, be quality assured and be actively investing in saving the planet at the same time.

“The real insight here is that there is a lot of extra value in the suckler animal that current beef grid price does not reward. From a starting point of two heifers of almost identical liveweights (590kg v 600kg) the suckler animal outperforms all along the food chain to yield €523 more value in retail sales. Allowing for her higher kill out and better grade, the farmer makes €184 (VAT excl) more on the suckler animal.  But is this enough of a fair reflection?”

“It is true that the suckler animal takes up more shelf space and has more distribution and retailing costs simply down to more packets of meat to sell. But with the massive efficiencies and economies of scale both in processing and retailing, it seems incomprehensible that a lot more of this extra €523 cannot be returned for the suckler type animal.”

“It is also important to note that there is a lot of value added without any major addition of cost other than processing to the O grade animal.”

However, there is another twist to the story which is the cheap food strategy which is destroying value for everyone. While the prices quoted here reflect prices charged in a supermarket in the past week, there are plenty of examples of similar meat cuts being flogged off cheaply.

“Supermarkets are notorious for using primary agricultural produce as a kind of “loss leader” to attract in the customers. They then sell the meat or vegetables for unsustainably low prices from the perspective of the primary producer but it doesn’t matter if other products are being sold to consumers at inflated prices. For example, one supermarket was selling 400g of minced meat for €2 and a few aisles down was charging €32 for 8 replacement shaving blades!”

“When you look at how much meat can be got from a suckler type heifer, it beggars belief that the suckler farming sector is on its knees. It is clear that further subsidies for sucklers are a waste of time if we do not effectively address the massive profiteering on these animals in particular. The carcass weight of this animal was absolutely spot-on when it comes to in-spec demands and therefore ideally suited to all retail markets. Yet the price of €1228 is an absolute scandal when you consider the time, effort and cost of producing her in a world where there are more and more demands on farmers.”

The ICSA beef chairman acknowledged that this trial has its limitations and that ICSA would be demanding that similar exercises were done on a wider basis both domestically and internationally as part of the Beef Markets Taskforce work programme.

ENDS

FARM INCOMES MUST BE FRONT AND CENTRE OF AGRI-FOOD STRATEGY TO 2030

28 NOVEMBER 2019

ICSA president Edmond Phelan has said, “No agri-food strategy is sustainable if it is based on primary producers losing money.” Mr Phelan was speaking following the first meeting of Stakeholder Committee responsible for the development of Ireland’s Agri-Food Strategy to 2030, held in Dublin today.

“Food Wise 2025 focused on expansion, but this has done nothing to increase incomes in the beef and sheep sectors. It is clear now that we must make a shift from prioritising growth to prioritising farm incomes as we devise this strategy to 2030.”

Mr Phelan also stressed that farmers must not be scapegoated when it comes to dealing with climate change. “As a result of much inaccurate information and dubious ideologies, farmers have unfairly been the target of biased commentary. It’s time for the real culprits in the energy, industry and transport sectors to be challenged.”

Concluding Mr Phelan said, “It is vital that our agri-food strategy to 2030 is a measured one, and one that takes into consideration all the pillars of sustainability: economic, environmental and social. To this end, processors and retailers must also be on board. Processors cannot expect to buy cattle for below the cost of production and retailers should not be selling at below the cost of production.”

ENDS

ICSA WELCOMES MOVES TO CLEAR ALL INJUNCTIONS

28 NOVEMBER 2019

ICSA president Edmond Phelan has welcomed news that C & D Foods will apply to have injunctions against two individuals struck out. “The continuation of injunctions went against the letter and the spirit of the Beef Sector Agreement and their removal will pave the way for the Beef Taskforce to meet, and this needs to happen as soon as possible,” he said.

“Valuable time has been lost and farmers have been losing money hand over fist in the meantime. It is wholly unacceptable that this matter should have been allowed to drag out for so long.”

ENDS

MEAT INDUSTRY CHARADE MUST BE BROUGHT TO AN END

27 NOVEMBER 2019

ICSA beef chair Edmund Graham has said he is baffled that ABP, through Meat Industry Ireland (MII), should bring allegations of death threats to the attention of the Ministers for Agriculture and Justice yet apparently haven’t considered them serious enough to bring to the attention of the Gardaí. “It is unusual for the Minister for Agriculture and the Minister for Justice to be dealing with any alleged threat, particularly a death threat, when the Gardaí have not even been informed,” he said.

“ICSA has fought hard to deliver increased levels of fairness and transparency to the beef sector, and the mechanism to do this is the Beef Sector Agreement together with the establishment of the Beef Markets Taskforce. We can only conclude that others, namely the meat industry and it’s representative body, do not share that same passion for delivering fairness and transparency to the beef farmers of Ireland and are engaging in efforts to thwart the process.”

“It is now incumbent on the Government to bring to bear whatever pressure is necessary to ensure this charade comes to an end.”

ENDS