The long-term strategic interests of meat plants and their major customers will be tested during the coming weeks in negotiations with farming organisations on beef specifications, weights and quality issues. At the heart of these technical discussions lie complaints from beef farmers that they are being paid much less than their British counterparts. Minister for Agriculture Simon Coveney’s acceptance of a need to “rebalance negotiating power for farmers in their dealings with meat factories” represented a tacit acknowledgment that meat plants had exploited their powerful positions with individual farmers. The establishment of farmer producer organisations, which will negotiate price levels on behalf of groups of farmers, should provide a fairer system.
Irish meat plants rely on a guaranteed supply of good quality, traceable cattle. The two largest purchasers of Irish beef, Tesco and McDonald's, have similar interests. Both groups, however, are expected to maximise their profitability. It is here that the interests of producers and of processors and retailers diverge. Lacking an adequate financial return on their animals, farmers may cut production and undermine an already-fragile food chain. Many are already losing money. In the year to last June, prices fell by 15 per cent and failed to rebound when a recovery took place in Britain. Farmer anger and despair was reflected in a 24- hour blockade of meat plants, the first such protest in 14 years.
Issues surrounding specifications and weights, which affect beef prices, should be resolved amicably. A two-week period provides time for detailed negotiations after a blockade that was estimated to have cost meat plants in excess of €10 million. A rise in prices will, however, determine whether farmers believe their complaints have been met. There are reasons for some optimism in that regard. Not only are prices in Britain particularly strong but market specialists predict a tightening of beef supplies in Europe, which should have a knock-on effect here. Mr Coveney said that prices are likely to trend upwards in the coming weeks and further strengthen next year. Such a development cannot come soon enough for financially-stretched farmers.
Traditionally, there has been a disparity in cattle prices between here and Britain, but not of the current magnitude. An increase in production, along with lower beef consumption in Europe, weakened the position of primary producers, to the benefit of processors and retailers. That can be expected to change in a cyclical industry. But an anticipatory and shared approach to changing circumstances would benefit all concerned. As with other aspects of international trading, the provision of greater stability and certainty, both in price and supply, should contribute to long-term success.
