Meat plants using NI as cheap Beef source

NATIONAL BEEF ASSOCIATION
June 29th 2009

MEAT PLANTS USING NI AS CHEAP BEEF SOURCE?

Deliberately diluted Northern Ireland cattle prices used as hammer to pound down ex-farm value of English, Scottish and Welsh cattle too.
       
THE largest suppliers of beef to UK supermarkets have such tight control over Northern Ireland’s prime cattle market they have moulded it into a private supply pool used, almost constantly, to manipulate market prices in other parts of the UK – and the Republic of Ireland (ROI).

And in so doing, they can pay much less for cattle, in all parts of the British Isles so farmers across both these EU countries are the losers, says the National Beef Association, the voice of beef producers nationwide.

“An extraordinary situation has developed in which a handful of powerful companies with huge plants in Britain, Northern Ireland and the Irish Republic, are able to take advantage of their careful geographical positioning to ensure the lowest price possible is paid for the huge numbers of cattle they buy between them,” explained the NBA’s Northern Ireland chairman, Oisin Murnion, a Kilkeel, Co Down farmer.
 “They are helped by the fact that beef from the ROI accounts for around 60 per cent of Britain’s prime beef imports and it is relatively easy to truck in huge numbers of cattle from the ROI into Northern Ireland for immediate slaughter if tighter supplies within the Province look like moving prices to levels closer to those most often seen in mainland Britain.”
 The usual price gap between prime cattle of similar classification and quality in Northern Ireland and Great Britain is 20p-25p a kilo deadweight. It is 22p at present, the equivalent of around £75 a head.
POOL
 “This large pool, which accounts for around 11-13 per cent of total UK supplies, of deliberately discounted beef is constantly used as a hammer with which to pound down the price of English, Scottish and Welsh cattle if strong consumer demand looks like lifting it too far above discounted Northern Ireland and Irish Republic levels,” said Mr Murnion.
“Over recent months the Northern Ireland cattle price has been constantly diluted by the importation of up to 920 cattle a week from the ROI, which is the equivalent of 13 per cent of weekly plant throughput inside the Province, even though the adverse sterling-euro exchange rate has made them much dearer than our own cattle in sterling terms.”
 “Slaughterers obviously believe it is worth paying significantly over the odds for 13 per cent of their throughput if its delivery suffocates the price of the remaining 87 per cent and also dampens down prime cattle values on a cross-Britain basis too.”
MARGINS
“It is no accident that the most powerful companies supply three of the UK’s biggest supermarkets, and if their stranglehold on Northern Ireland’s cattle price and supplies is not enough to deliver them the additional margins they gain from buying cattle that are much cheaper than those on the mainland they simply ramp up the proportion of deliveries they secure from the Irish Republic where cattle are significantly cheaper too.”
 “Beef farmers in Northern Ireland suffer most but those in Britain and the ROI are also victims because the origin of beef aimed at most of the UK’s biggest buyers is constantly manipulated to make sure that tighter supplies in any of the three main cattle procurement pools are never allowed to translate into prices that accurately reflect the regional demand-supply balance,” Mr Murnion added.
Ends
For more information contact; Oisin Murnion, NBA Northern Ireland chairman.
Tel. 07739 632048. 
Press release from Kim Hayward, NBA director 0131 336 1754