In a statement, Sinclair said he was alarmed, but not surprised, that the average cost of suckler beef production in the country was £3.82/kg – as highlighted in a recent Livestock and Meat Commission (LMC) quarterly bulletin.
According to Sinclair, the Department of Agriculture and Rural Development (DARD) had been given the task of calculating the average cost of suckler beef production. He said the result of £3.82/kg was staggering – particularly so since the prices paid for suckler origin cattle in 2011/12 was 70p/kg lower than the price it cost producers to rear.
Making the situation “more worrying”, Sinclair said, was the fact that the figure excluded any allowances for labour costs, including land or working capital. “[This] makes the situation even more worrying and calls into question the survival of the suckler beef industry without immediate action from the supply chain,” he added.
“Our beef farmers continually strive to improve efficiencies on-farm, but have struggled with steadily rising production costs in conjunction with the impact of last year’s dismal grazing season, and yet the supply chain continues to turn a blind eye and neglect its primary supply base. This cannot continue,” Sinclair said.
Sinclair then explained that “now is the time” for Northern Ireland’s supply chain partners, processors and retailers to “pull their heads out of the sand”. He said that unless this happened, the country’s primary suckler beef was likely to disappear, but added that, if supply chain partners, processors and retailers started to pay a “fair price” for the product, then producers would fair better.
“Time and time again we have told the processors face-to-face that farmers cannot continue to survive below the cost of production and that they are responsible for safeguarding their primary supply. This has simply fallen on deaf ears. While prices have risen slowly in recent weeks, purely in response to supplies tightening, they have not gone far enough towards tackling the problem,” Sinclair said.
Meanwhile, he pointed out that the “ongoing price differential” between Northern Ireland and Great Britain was continuing to frustrate producers, of which he said: “The UFU is actively engaging in the LMC price differential review, and we hope it will provide the answers we need to tackle the issue and ensure fairness for beef farmers in Northern Ireland. Rectifying the differential may go some way towards alleviating the cost of production but more must be done.”
He also pointed out that retailers were wrong to squeeze margins and “actively seek the cheapest products” on behalf of customers, as a recent Northern Ireland Consumer Council Report showed “consumers are voicing concerns about local farmers being unfairly treated by the supermarkets by not getting a fair deal”.
Sinclair continued: “The retailers are often fond of championing the buzz word ‘sustainability’, which is ironic in the context of the treatment of their primary suppliers. The reality is that the supply of suckler beef is not sustainable at current farm gate prices. Rather than retailers paying lip service to caring for local farmers, now is the time for them to show it.”