The Chairperson of ICMSA’s Livestock Committee has said that new data around farmer margin of final retail beef price supports the need for the long-awaited reform of margins promised by the EU’s setting up of an Inception Impact Assessment.
Michael Guinan noted that while some commentators would point to a consistent farmer percentage of around 50% of final retail price, this was despite overall price fluctuations as evidence of stability that was to entirely miss the point.
“The fact that the percentage is consistent is completely secondary to the fact that percentage is too low in the first place,” he added.
“Farmer’s problems do not arise from month-to-month fluctuations in their share of final retail price; they arise from the fact that farmers share of final retail price is hopelessly insufficient by comparison to their inputs to produce the beef and by comparison with the percentage of final margin taken by the factory and the retailer.
He added, “The simple truth is that farmers have to take the animal up to 30 months with all the man-hours, feed and veterinarian that involved, for which they get generally less than 50% of final retail price.
“The factories and the retailers have the carcass for less than three weeks - with no costs involved past highly mechanical killing and butchering – and they receive generally in excess of 50% of final percentage price.
“There is simply no comparison in terms of investment and inputs between the two ends of the supply-chain and unless and until the farmer percentage is drastically revised upwards the long-term viability of our vital beef sector will remain a matter for speculation.