ICSA DENOUNCES PRICE CUTTING PROCESSORS

20 JULY 2018

ICSA beef chairman Edmund Graham has hit out at meat factories, describing their current appetite for price cutting as “opportunistic, misguided and short sighted in the extreme.” On the back of processors pulling prices for the last number of weeks, Mr Graham said, “With drought conditions prevailing right around Europe, feed is getting scarce and the price of producing food is rising. The message that should be communicated to retailers is that price rises are required due to the massive increase in input costs.”

“Prime cattle that were selling up to recently at €4.30/kg are making just €3.85 today. On a 400kg carcass that’s €180 of a cut which anybody can see is completely unsustainable.”

Continuing Mr Graham said, “Rapidly rising grain prices throughout Europe during a drought is an indicator of a general increase in commodity prices. It is galling that processors should penalise primary producers at a time when their costs are escalating. It again highlights the lack of solidarity shown to producers from processors and retailers.”

“Worse still, it defies economic logic to be translating increased costs of feed into lower food prices for supermarkets. Although prices paid to farmers have plummeted, demand hasn’t fallen. There are no indications that factories are having any difficulty selling beef or that fridges are full to capacity.”

“We are also coping with huge numbers of dairy cows being presented for slaughter which is having a big impact on the price suckler and beef producers can achieve.”

“Opportunistic price cutting by processors places the entire financial ramifications of this drought on producers. This is a burden that should be shared and momentum towards establishing fair play for farmers needs to be placed higher on the agenda. The amount of mental stress on farmers at the moment is frightening and processors have a lot to answer for when they use the drought to screw farmers at a very vulnerable time.”

ENDS