Threat of more Irish beef may increase market instability
By Robert Harris
IRISH beef imports could increase this autumn, leading to an erosion of recent price increases.
The reason is that the Irish deseasonality payment, which pays producers to offer cattle for slaughter between January and mid-June, is working too well.
Producers receive payments of between £60 and £15 a head depending on when cattle are killed. About 490,000 steers qualified this season, worth £27m to producers.
As a result, the number of animals processed in the first four months of the year has risen from 32% of the 12-month total in 1993, when the scheme was launched, to almost 40% this year, says Robert Forster of the National Beef Association.
Naturally, autumn slaughterings have decreased. The catch is that deseasonality payments can only be triggered if 35% of cattle are processed between September and November. This did not happen in 1997, says Mr Forster. Without the payment, it will no longer pay Irish finishers to wait. "We have already had one big dollop of Irish beef this year, most of it between January and April. We could be due a return to the autumn glut."
The Irish do have a clause to cut second beef special premium payments to fund a reduced deseasonality scheme, says Duncan Sinclair of the Meat and Livestock Commission. "The Irish government were mulling this one over – I have not heard if it has made a decision."
It has not, according to Michael Treacy, director of the Irish Farmers Association in Brussels. Instead, the Irish government has been lobbying hard at this weeks Council of Ministers meeting in Luxembourg to maintain deseasonality payments.
"If we fail, a lot of animals will be killed in the autumn. That will trigger a need for intervention which will be much more costly." *