Ulster Farmers’ Union beef and lamb chairman, Crosby Cleland, says that the considerable reduction in beef prices in the first quarter of 2016 compared with the same period in 2015 is seeing beef producers lose a million pounds a week.
The UFU says it is well aware that all sectors of farming are struggling with prices below the cost of production and those multi-million pound losses for beef producers are further evidence of extreme pressure on farm incomes.
“It’s no surprise that losses on this scale are undermining producer confidence and creating uncertainty about what the future holds for family farms. With direct payments to beef farmers set to drop each year until 2021, processors must realise they will have to pay more for cattle if they want supplies to be maintained,” warned Mr Cleland.
The UFU says it frequently hears from its members of beef processors seeking to talk the trade down.
“Beef prices are already at a level that is not viable. For processors to seek to drive prices even lower highlights the short term view they often take, as they seek to capitalise at farmers’ expense,” said Crosby Cleland.
He added that in reality no-one knows what will happen in the market this year.
“What is certain is that if we allow processors to continue driving more negativity into the market then we as farmers will start believing it exists,” he said.
The UFU believes cattle numbers being processed are starting to tighten, while exports of beef from the UK since the beginning of the year have significantly increased on the back of a weaker sterling/euro rate.
“There also continues to be a considerable price differential between Northern Ireland and Great Britain. This has to mean that processors here are finding a ready home for beef, whether that is in the UK or wider European markets,” said Mr Cleland.
Against this background he says farmers should ignore the excuses processors continue to pedal about the difficulties they are experiencing.
“Instead farmers need to hold out for the best prices they can get and make sure they are not gifting the processors with under-finished cattle which might be better off in the live ring, if there is pressure on cash flow,” he said.