Growing concerns with beef price differential
Wednesday, 3 August, 2016
The increasing price difference between Northern Ireland and Great Britain is a growing concern for local beef producers, according to Ulster Farmers’ Union Deputy President, Victor Chesnutt.
Article key points
- Prime cattle prices in GB have strengthened week on week but prices in NI have stagnated.
- Local processors trying to stall increases in base price.
- GB/NI price differential has risen from 3p/kg to 13p/kg over the last month. Equating to roughly a £50 loss on a 380kg animal.
- Euro/sterling exchange rate gains not being shared with farmers.
- Processors working off a policy of short-term gain and forgetting about the long-term impact this has on farmers.
- UFU encouraging DAERA to focus on breaking down the trade barriers that already exist for local farmers seeking to trade with GB.
“Over the past month prime cattle prices across Great Britain have strengthened on a weekly basis and are currently averaging 346p/kg for R3 cattle,” said Mr Chestnutt. He explained that while trading conditions for farmers in the rest of the UK have improved, prices in Northern Ireland have continued to stagnate. “Local processors have up to now been trying to stall any increases in the base price. This has resulted in the growth of the price differential from 3p/kg to 13p/kg over the last month, which on a 380kg animal is almost £50. For local farmers this is a concerning trend, with many still trying to recoup heavy losses from finishing cattle earlier in the year,” said Mr Chestnutt.
Local processing representatives have recently reported an improvement in trading conditions, part of which is attributed to the Euro-Sterling exchange rate which has moved onto much more favourable terms for local processors seeking to export. “Despite these improving conditions, local processors have to date not been prepared to pass this back to farmers. Once again this demonstrates that processors are working off a policy of short term gain for them and forgetting about the long term impact this has on the farmers who supply the raw materials,” added Mr Chestnutt.
Earlier in the year the UFU highlighted the lack of activity by DAERA to tackle the price differential and their acceptance of the status quo. “With a new Minister in place we expect changes in the direction DAERA policy will take, particularly in terms of trying to increase live exports from Northern Ireland,” said Mr Chestnutt. He added that since the EU referendum there has been much talk about ‘potential trade barriers’ between the UK and ROI. “DAERA need to focus on the trade barriers that already exist for local farmers seeking to trade cattle with Great Britain. Reducing red tape and promoting the live export of cattle from Northern Ireland will be essential going forward in helping to sustain local beef production,” said Mr Chestnutt.