There needs to be a fundamental rethink of the EU price support mechanisms in the case of extreme weather crises, according to ICSA president Patrick Kent. He has called for a review of market support measures such as the Aid to Private Storage Scheme (APS), in light of the drought conditions.

“Factories are lapping up the opportunity to buy in lighter-carcase dairy cows cheaply, but the knock-on effects are hitting the wider beef sector hard,” Kent said. “With the oversupply of cull cows predicted to continue indefinitely, the prime cattle trade is being undermined. This, coupled with ever-increasing input costs, means there can be no doubt that a support mechanism to underpin the market in times of severe crisis is badly needed.”

APS scheme

The aim of the APS scheme is to allow producers to store product for a stipulated period of time, with product then released back into the market at a later stage. However, Kent said: “The scheme can only kick in when the price of beef falls below 85% of an EU reference point – that is set far too low and needs to be adjusted.

“Dairy reference prices are set at levels which mean that they can sometimes help the dairy sector but the beef levels are not fit for purpose.”

A properly functioning APS could help both dairy and beef sectors by taking out surplus cows on a short-term basis when there is surplus cattle going to factories due to a fodder crisis, according to the ICSA.

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