NI meat producers losing £180m

Fundamental changes are needed at all levels of the supply chain to return the red meat industry in Northern Ireland to profit.

According to a Northern Ireland Red Meat Task Force report published on Wednesday (3 October), beef and sheep producers are losing approximately £180m a year, excluding interest and depreciation costs.

In contrast, the processing and retailing sectors make a combined profit of about £40m a year.

Even with the most aggressive cost efficiency savings, the Task Force could not find economically viable solutions for suckler beef and hill sheep production at current market prices.

For suckler beef producers, a market price of £3.20/kg is needed to give a proper economic return for all of the fixed and variable costs of production, even after stretching targets for efficiency savings are implemented.

For hill sheep production a market price of £3.35/kg is needed to achieve viability with similarly stretching efficiency targets.

Beef produced from animals originating in the dairy herd are closer to economic viability, says the report, with prices at about £2.20/kg.

Upland/lowland sheep meat production is also viable, for farmers operating a scale of 600 ewes, at current market prices.

 “There is a lot of work to be done across the whole industry,” said Task Force chairman, Owen Brennan. “The first step is to seek a positive response on market prices.” 

UFU president Kenneth Sharkey said the report provided irrefutable evidence that, without a radical new approach, high quality beef and lamb production in Northern Ireland would disappear because of the chronic losses being incurred.

“This Report confirms beyond any doubt what producers already know; that they are losing enormous sums of money while processors and retailers enjoy a profitable position in the supply chain for local beef and lamb.  That in itself is a disgraceful situation.

“I am challenging retailers to put contracts on the table to secure the supply of locally produced beef and lamb, otherwise their customers will eventually be denied the choice of local product and Northern Ireland will lose one of its finest industries.”