Beef exports are declining, initial cuts no longer require the premiums they once did, and with no clear signal about where the market will go next, uncertainty is growing for farmers.
But one thing is certain according to the industry group representing 28 of Ireland’s major beef, pork and lamb processors – “it is not in anyone’s interest to see beef prices fall as they have been in the last two weeks”.
Dale Cramond, director of the Irish Meat Industry (MII), also said it was “very difficult” to predict which direction the market is headed and a lot will depend on whether there is any “boom” in the second half of the year.
Cramond was before a lively meeting of the Oireachtas Joint Agriculture and Food Committee to discuss reducing the numbers of livestock killed and their prices.
He warned that the market is currently “very transient” and that it revolves around a question of supply and demand.
Committee members learned that the Irish beef sector depends on exports, with 90% of its production sold on international markets.
According to Cramond, it is important that the country now focuses on “the Irish brand and Irish beef” and capitalizes on the “positive sentiment” that exists despite the cost of living crisis in key markets such as the UK.
Traditionally, Irish beef exports accounted for 80% of UK beef imports, but increasing competition from Australia, New Zealand, Poland and Brazil, combined with the fact that consumers have substituted ‘cheaper proteins’ has seen a worrying shift in this market.
But it is not just the UK that is challenging Irish beef exports at this time, European markets have also declined significantly and in some cases rapidly, and this trend is directly linked to consumer demand.
One of the key messages from the Department of Industry and Minerals to MPs and cross-benchers was that “the supply chain is not working” in Ireland currently and that “volatility is too high”.
He explained that the processing sector is currently operating at 80% capacity, but usually at this time of the year it will operate at full capacity.
As a result, “there is no cold storage in the country” where there is the capacity to place manufactured products – this according to MII is because “contracts do not exist at the moment”.
The MII explained that contracts are not at the level they would normally be, because Irish exports are “down 10%” to the UK.
The TDs and Senators assured MII representatives at the committee meeting that farmers were now at their “wits’ end” about the pressures they face and the prices being paid by factories.
