Irish beef prices hit by weak sterling
The Irish insists meat processors association insists it's the currency differential that is driving down the farm gate price
9 December 2008 | 0
Trade group, Meat Industry Ireland (MII) has said that the recent slump in sterling value against the euro has seriously undermined returns from Irish beef exports to the UK, its most important market. At 86 pence to the euro, sterling is now 23% weaker than the same time last year.
MII says that this currency differential, combined with declining sales across all EU markets, especially for steak cuts, and the “collapse of the hyde market”, has contributed to driving down cattle prices in recent weeks.
“Any suggestion that the weakening in cattle prices recently is not justified by market conditions is simply wrong,” says Cormac Healy of MII, reacting to protests by Irish beef farmers in County Donegal. MII maintains that, in spite of current conditions, Irish meat processors have delivered cattle prices that are 17% ahead of last year’s rates.
Despite these claims, the ISCA (Irish Sheep and Cattle Farmers Association), which organised the Donegal demonstrations, insists that the 45c/kg price drop implemented since the beginning of autumn is “just a stunt” by the beef processors to cause “panic” among farmers. Martin McMahon from farmers’ representative group ICMSA said that all cattle rearers should challenge the price cuts, saying that the 5% drop in cattle kill numbers this year makes the decreases even less justifiable.
The protests against the meat processors come just as the European Court of Justice ruled against their proposed scheme for rationalising the meat processing sector in Ireland. In a legal battle with the Competition Authority since 2002, the ECJ has ruled that the scheme, which involved paying meat processors to leave the sector, is in fact anti-competition. The European Commission welcomed the ECJ ruling, commenting: “Agreements between competitors to restrict capacity or production are hardcore restrictions of competition, which very often harm consumers.”