ANGER OVER LAMB PRICE CUTS
Posted on: 24/05/2012
IFA National Sheep Chairman James Murphy has accused the factories of pulling down lamb prices and undermining the market. He said the tactics used by some factories were very damaging and destabilising, and eroding farmer confidence and trust.
James Murphy said, “Earlier this week, some factories were openly telling their farmer suppliers that lamb prices would be down by another €10 per head by the end of the week. This is irresponsible and nothing short of attempting to lead down the market by driving fear into farmers with lambs fit for sale. Farmers will not tolerate this abuse of confidence by the factories.”
The IFA sheep farmers’ leader said spring lamb producers are extremely angry with the factory lamb price cuts. “Prices are now €23 per lamb or 116c/kg below last year levels. In addition, costs have increased by up to €5 per lamb, leaving farmers short changed by €28 per lamb. These cuts have completely eroded the profitability of early lamb production and prices have now been pulled below 2010 levels.”
James Murphy again called on the factories to act responsibly and stabilise the lamb market. This is crucial at this stage in the lamb season. IFA has met An Bord Bia and asked them to immediately bring forward their main promotional campaign. Most retailers have made the change over to spring lamb and now is the time to press the button on promotions to stop the price fall.
The IFA sheep leader said the inability of the factories to deal with the very small level of regrowth in the sector this year has sent shivers through the sheep sector and any expansion plans as outlined in the Food Harvest 2020 Plan.
James Murphy said with total supplies up only 34,000 head to-date this year, there was no market justification for the factory price cuts. He said this week UK prices are the equivalent of €5.70/kg and the French market is returning €5.25/5.35/kg. Based on these market returns, the factories can well afford to pay a base price of over €5.00/kg. In addition, despite some fall off in the value of lamb skins, the value of the fifth quarter remains very strong.
James Murphy said the current crisis could have been avoided and certainly minimised, if the factories were prepared to engage on a positive basis with farmers. “IFA has proposed the setting up of an industry stakeholder group that would deal with forward planning and market signalling to avoid these problems. Regrettably, the factories have not been prepared to engage to any meaningful extent. The sheep sector must find a better way, other than crashing the price, in making the switch over from hoggets to spring lambs.