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ICSA beef chairman Edmond Phelan has said he is very anxious about further consolidation of the beef trade in the hands of the big three, following news that Dawn Meats is to acquire Dunbia.
“Decreasing competition in the meat processing sector is bad news for farmers. This deal will only serve to increase the all-powerful and dominant position of this small circle of players.
“Farmers struggle on a daily basis to get a fair price for their cattle from factories, this is just going to weaken their position even further.
“It proves once again that the only hope for the beef sector in this country is competition between live exports and factories.
“ICSA wants to see more support for the live trade from Minister Creed, to give farmers that added option when selling their cattle. It is now more apparent than ever that it is the only show in town to deliver badly-needed relief to hard pressed cattle farmers.”
Phelan said that the only other hope would be for processors to try to use their increasing dominance to push for higher prices from retailers when beef is scarce, rather than driving down price to farmers when beef is plentiful.
However, he said the evidence is factories are increasingly using their own feedlots to undermine independent farmers making a profit.
Ownership concentration
IFA president Joe Healy said farmers are always concerned about the concentration of ownership in the beef processing sector, because of the lack of competition, as evidenced in the independent competition report on beef processing commissioned by IFA in July 2016.
“The major concern for farmers is that they get a fair and viable price return from the market,” Healy said this week in reaction to the news.
Farmers ‘incredibly wary’ of beef market power concentration
Farmers are incredibly wary of the present trend towards concentration in the beef industry, chairperson of the ICMSA Livestock Committee, Michael Guinan, has said.
Guinan said that while no-one doubted that companies might have to reorganise and restructure in light of Brexit, the danger was that such reorganisation resulted in a narrowing of sales options for the farmers producing the beef.
This had to be guarded against and it underlined – yet again – the pressing need for a concentrated and co-ordinated drive on the live exports front that would give the farmers alternative outlets for their cattle, he said.
He continued that farmers were justifiably concerned that ongoing concentration in beef processing will translate into lower prices and further pressure on already stressed margins.
It is important that farmers are given assurances in relation to this critical issue and that the Minister for Agriculture, Food and Marine ensures that farmers continue to have options when selling cattle – options that must include enhanced live exports, he said.
SHARING OPTIONS: