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Irish Farmers Call for Urgent Rise in Beef Prices

31 October 2014

IRELAND - Irish cattle farmers have called for an urgent rise in beef prices paid by the processors.

Following a meeting of the Irish Farmers’ Association Executive Board, President Eddie Downey said there has to be an urgent response from the meat factories that delivers a price increase to farmers that reflects the improved market situation.

Mr Downey said farmers have struggled with loss-making beef prices through all of 2014 and patience on the ground has run out.

For the first time the round table included an exchange of views with the buyers of Tesco and McDonalds, who together are the biggest buyers of Irish beef, both by volume and value.

Agriculture Minister Simon Coveney said: “The engagement was very useful and constructive and had two significant outcomes.”

At the Minister’s request, farm groups and processors have now agreed to engage in intensive discussions over the next two weeks on the commercial issues in dispute, under an independent chairman, Michael Dowling.
The Minster also secured a strong endorsement from all stakeholders for the establishment of farmer owned Producer Organisations in the beef sector, to help to rebalance negotiating power along.

Speaking after the meeting, Mr Coveney said: “I am delighted that all of the participants in the forum endorsed the establishment of Producer Organisations in the beef sector.

Providing for Producer Organisations in the sectors such as beef was a strong focus of mine in the re-negotiated CAP last year.

“It is clear to me that they represent the best opportunity to re-balance the relationship in the supply chain between producers and processors by empowering farmers to organise collectively for the purposes of negotiating on prices with processors.

“Such organisations can also add value through the common purchase of inputs, joint distribution, marketing and the agreement of quality specification. I updated the group today on the outcome of my Department’s public consultation exercise and emphasised that I am anxious to progress this matter as quickly as I can.

“My Department will now move to engaging directly with stakeholders on putting in place the required framework for Producer Organisations to develop.”

Referring to the contribution of Tesco and McDonalds to the meeting, the Minister said: “Today was the first time that the Roundtable heard directly from buyers in the form of McDonalds and Tesco. It was useful to get their perspectives on the future direction of the industry, and I look forward to their further engagement in this process.”

The meeting also heard from Bord Bia in relation to recent price developments and on the market outlook for beef internationally.

On markets, Minister Coveney said: “This weekend I am leading the largest ever Irish agri-food trade mission to China. One of my key priorities is to make progress on the question of access for Irish beef. This work, allied to our ongoing engagement with the US and the opening of markets such as the Philippines recently, are key elements in the sustainable development of the beef sector I have also provided Bord Bia with additional funding next year and I am confident that this can make a contribution to the marketing and promotion of Irish beef on EU and continental markets.”

The Minister also referred to the responses of stakeholders to the Dowling Report which were discussed.

“I am pleased that the recommendations in the Dowling Report are being actively followed up. My Department’s Beef Pricewatch App has been launched and is making a significant contribution to increased price transparency for farmers.

“This will be further developed over the next few months. I have also asked Teagasc, AHI, ICBF and Bord Bia to deepen their collaboration to ensure a coherence between production advice and market realities. In addition, I have asked these agencies to convene a technical group to look at specific strategies to improve suckler cow fertility, in order to improve the economic return for farmers.“

In addition to the updates from DAFM and the Agencies, the meeting also heard from Meat Industry Ireland who expanded on their recent submission to the Dowling Report.

Concluding the Minister said: “I am fully aware that beef farmers have had a challenging year having seen reduced prices for their animals compared to this time last year. I welcome the honest exchange of views between stakeholders today.

“There are areas of disagreement between stakeholders in the sector right now, but this simply reinforces the need for constructive dialogue on issues of strategic importance.

“This Beef Forum is a vehicle for this kind of engagement and I am grateful to those who have agreed to participate today and I welcome their contribution to the debate on the development of this critically important sector. This evening, I have secured agreement from the stakeholders to engage intensively on the commercial issues in dispute, and I have agreed to hold another meeting of the forum in two weeks’ time”.

The IFA President, Mr Downey said: “At the Beef Forum, Minister Coveney challenged the factories directly as to why they are not returning the increased market prices to farmers. The response from the industry has to be swift and meaningful.”

Mr Downey said he made it very clear to the Minister and the factories at the Beef Forum that they must respond to this week’s 24-hour beef protest by 15,000 farmers by addressing the massive €350 per head price gap that has now opened up with our main export market in the UK.

The IFA President said the meat industry’s commitment to the Minister to address the issues must translate into beef price increases for next week.

He said: “Minister for Agriculture Simon Coveney confirmed that he will convene another meeting of the Beef Forum on 12 November and in the interim, he expects significant progress to be made on the market price and specification issues.”

The IFA President said the QPS payment system has to be fixed as part of these discussions. Failure to deal with these issues comprehensively by 12 November will be failure for the Minister’s Forum.

With UK beef prices increasing by 30c/kg (€100 per head) in the last number of weeks, Mr Downey said there is no excuse for the factories to withhold a price increase to farmers.

He said there is no credible explanation why the strong price increase in the UK, which takes over half of our exports, is not reflected in higher prices to Irish farmers.

 

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