Farmers who have been withholding cattle from factories in an effort to push up prices were warned by the meat plants at the weekend that they "cannot buck the market".
"Withholding supplies may force higher prices in the short term but processors cannot buck the market in the long term if they want to remain in business and be seen as reliable suppliers of quality product," said a document circulated by the Irish Meat Association at the weekend.
The processing industry went on the offensive in recent days when it emerged that the Irish Farmers' Association "boycott" of plants was beginning to bite.
The Irish Food Board has reported that throughput at meat plants for the week ending March 9th was 5,000 head down on the preceding week, and 15,000 lower than the corresponding week last year.
However, in a comprehensive review of the sector, the factories rejected the assertion by the IFA that Irish prices had dropped much faster than in other EU countries.
The IMA said that steer prices in Ireland at the beginning of March were 17 cent per kilo higher than at the beginning of January, whereas prices in England and Northern Ireland showed an increase of only 2 cent per kilo during the same period. It added that the price drop in February for cattle had also taken place in England and Northern Ireland but the decrease here was less than there.
The IMA also said that Irish cattle prices had made a full recovery from pre-BSE crisis levels while prices in France and Germany remained 8 to 12 per cent below their level in October 2000. In the Netherlands, the price was still 27 per cent down.
"The gap between Irish and GB prices in early March 2002 was the same as the gap that existed in October 2000 prior to the BSE crisis when Ireland had proper access to the full range of EU and third country markets," said the IMA document.
The IMA said it had sold an extra 7,500 prime cattle each week into commercial outlets during January and February this year compared to 2000. "According to Bord Bia forecasts, the industry will have to find commercial market outlets for an extra 95,500 prime cattle in the March-June 2002 period compared with the volume marketed in the same period last year," it said.
It added that even taking into account increased sales of Irish beef to the UK and European markets, there would still be a need to find non-EU outlets for 150,000 tonnes of Irish beef this year.
The IMA said 70 per cent of Irish beef sales in the UK went to the lower wholesale/catering sector, and that demand for Irish beef tends to increase sharply in the UK when the multiples conduct promotional programmes. None are planned this side of Easter.
Processing costs in Ireland have increased sharply in recent years. Slaughtering and deboning costs were now €76 per head higher than in 1999, and €127 per head higher than in 1995, it said.
It added that specialist beef farmers were getting profit for their finished animals based on what they had paid for cattle in the previous autumn. It estimated the profit was €71 per animal for the better-quality beast.
Premiums, it added, had increased substantially in recent years, as had beef prices. It urged a joint approach by factories and farmers to address the problems.