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Phelan said the talk of the sterling collapse is over-done.
"There is too much sensationalism about the pound sterling hitting a 31-year low when, in fact, this relates to the exchange rate with the US dollar," Phelan said. "From a beef exports point of view, the relevant exchange rate is sterling-euro.”
Phelan said that although the value of sterling has fallen to about €1.20 since the Brexit decision, the rate of exchange throughout 2016 has generally been in the range of €1.25 to €1.30.
"So in fact, the purchasing power of sterling is down between 4% and 8%.
"Moreover, throughout most of 2012 and 2013, sterling was worth less than it is now. It is true that sterling appreciated in 2015 but it was very clear that the benefit of strong sterling was not passed back to Irish beef farmers at that time. Farmers will remember this was demonstrated by the huge gap that opened up whereby Irish farmers were getting up to €1/kg less than their British counterparts."
The beef chairman added that although "there is no telling what will happen in the coming months", the general trend is for markets to over-react in the immediate aftermath of a crisis which is then followed by some level of stabilisation.
Advice
The advice from the ICSA for beef farmers is to sell cattle when they are fit and not to be coerced into selling hastily.
"We cannot allow ourselves to be spooked by factories trying to create a panic. The key point is that cattle are scarce and factories are not getting a rush of cattle, which of course is helped by plentiful grass at this time of year. While quotes are hard to get at present, indications seem to suggest that steers are getting €3.95 and heifers are making €4.05 to €4.10.
Cows are a more difficult trade but that’s down to the time of year and extra culling in dairy herds," Phelan concluded.
Farmer concern over short-term market prices and access after Brexit
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