Farmers were warned yesterday that they will need to receive £1 per lb for beef in the coming spring if they are to make a modest profit margin over the winter.
This is 10p per lb more than the price farmers sought last year which led to a blockade of the meat factories in January.
The warning came at the ploughing championships from Mr Bernard Smyth, chief adviser with Teagasc, the agriculture and food development authority.
He said that at current prices for cattle the margin on winter finishing would be a modest £50 per animal, assuming the spring beef price was 98p-£1 per lb for top-quality continental-type cattle.
And he stressed that only farmers who achieved extremely high levels of animal performance would win a margin of £50 per animal over the winter. He urged farmers producing beef in coming months to reach an arrangement with meat factories on likely demand for the product next spring and the quality required. "They should also get a firm indication of price in order to reduce the financial risk involved in winter beef production," he said.
He said farmers buying animals now for sale this time next year would need to be receiving 96p per lb in the autumn of 2001 to make a margin of £160 per animal over the full year.
And Mr Smyth also urged farmers to be cautious in relation to bull beef production, which is a fast-growing sector. Prices for bull beef could be more vulnerable than conventional beef prices unless production was planned through farmer/factory linkages, he added.
The export of live animals to EU markets this year was likely to reach 500,000 head, but to maintain a foothold and increase this market share the quality of breeding stock had to be improved, said Mr Smyth. He was announcing a comprehensive financial budget package covering beef production systems which had been drawn up by his organisation for beef farmers.
Commenting on Mr Smyth's warning, the chairman of the Irish Farmers' Association's national livestock committee, Mr Derek Deane, predicted that finished cattle numbers would continue to fall, and this would result in a strong market for producers.
"Scarce supplies and buoyant EU market demand should keep prices strong. At present, prices are 8-10p above last year's levels. For next spring this price increase of 10p per lb must be maintained over the spring's minimum base price of 90p to leave winter finishers with a profit margin," he said.
The leader of the Irish Creamery Milk Suppliers' Association, Mr Pat O'Rourke, said that if there was a referendum on EU enlargement he would advise his members to vote "No". He was convinced Europe was moving "too fast, too soon".
"If there was a referendum on this issue in the immediate future, ICMSA would be advising our members to vote no because of the great uncertainty," he said.
Mr O'Rourke said that enlargement was a political decision that had not been properly funded to date. "In fact, the European Council had ignored this very critical aspect. This is no way to build the Europe of tomorrow."