The current beef prices quoted to farmers are not adequate to cover recent increases in production costs, with a price of €6/kg now needed to offset inputs costs, the Irish Cattle and Sheep Farmers Association (ICSA) has said.

Beef prices need to rise “significantly” for farmers to be left with a positive margin after selling finished animals, according to ICSA beef chair Edmund Graham.

“A small percentage of farmers are achieving €5/kg-plus when bonuses are added in, but when costs are spiralling out of control, it’s just not enough and we need to see base prices rise significantly,” Graham said.

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“Until recently, €5/kg would have been viewed by farmers as the minimum price needed to make ends meet. Indeed, this is what Teagasc was saying as far back as last autumn. But that was then.

“With costs getting so out of control, it is wishful thinking that €5/kg would cover our production costs now. Fertiliser prices have gone through the roof and feed prices, which have already reached record highs, look set to rise even further,” he claimed.

Feed and fertiliser prices

Graham went on to state that Teagasc estimates feed and fertiliser price hikes placed an additional 65c/kg on to the input costs of producing a kilo of beef.

“Teagasc has now estimated that inflated feed and fertiliser costs are adding around 65c/kg to the cost of producing beef.

“But it’s not just feed and fertiliser prices that have gone up, inflation is hitting all our costs and it is wiping out any potential to break even at current prices,” he said.

Conflict in Ukraine

Further increases in the costs of production are likely in the coming weeks and months, Graham told farmers.

He suggested that disruption to Ukrainian wheat exports had the potential to drive the costs of grain upwards and that fertiliser imports could also be affected by the conflict.

“The war in Ukraine is likely to exacerbate input cost inflation significantly. The immediate impact will be to drive wheat prices sky high and this will have a knock-on effect on all feeds.

“Ukraine is also a significant exporter of fertiliser and all of this means that producing beef at €5/kg will not be viable,” Graham concluded.