IFA go to CCPC about beef price competition concerns

He said it is the CCPC’s responsibility to guarantee robust competition in the beef processing sector, and farmers had seen no evidence that the CCPC were prepared to tackle the competition issue in beef processing.

It’s a very long-running row between cattle farmers and beef processors, which flared up in 2016 when Larry Goodman’s ABP purchased 50% of Slaney Foods. At the time, Meat Industry Ireland (MII), representing processors, dismissed IFA concerns about competition, pointing out processors were paying 10% over the EU average for cattle in Ireland, indicating very competitive market conditions.

MII said the Irish industry exports 90% of its product into markets where cattle were cheaper than in Ireland, indicating extremely strong competition compared to other EU markets.

Irish cattle prices had risen by over 40% in five years, according to MII, which said farmers should focus instead on challenges and risks arising from Brexit.

But IFA are back on the warpath to the CCPC, because of a proposed merger between two of the country’s big beef processors, Dawn and Dunbia.

IFA cannot be blamed for keeping the CCPC on its toes.

After all, the beef industry worldwide is not known for being squeaky clean.

And continuing revelations about the world’s largest meat processor, JBS, are enough to frighten any livestock farmer around the world.

JBS has become a byword for shady practices, and it was all made possible by the lack of an effective CCPC in Brazil to guarantee robust competition. JBS expanded fast from 2008 to 2012, from owning 13% to 51% of the abattoirs in Mato Grosso, the Brazilian state which has 30 million cattle — making it the world’s second-biggest beef producer after the US.

The JBS expansion, backed by leftist governments and bankrolled by Brazil’s state improvement financial institution, left ranchers facing a near monopoly situation.

JBS also rented abattoirs from smaller companies, but closed them, to further dominate slaughtering capacity.

The expansion helped JBS purchase companies worldwide, from the UK to Canada to Australia. But shady practices were rife, and the company is now in big trouble.

It has even plunged Brazil into a corruption furore that’s likely to drag down the government.

First hit last March by the “Weak Flesh” scandal in which JBS and other companies were accused of bribing inspectors to OK sub-standard meat, JBS was then hit by revelations that its former chairman secretly taped Brazil’s President Michel Temer allegedly discussing bribes.

An executive admitted the company paid €158 million in kickbacks to 1,829 politicians.

And in late June, the US suspended imports of Brazilian beef, citing concerns about meat safety.

Ranchers have felt the fallout, with cattle prices falling. Some fear they could be down 22% by year-end.

Like IFA, they are on the offensive. However, unlike the Irish farmers represented by IFA, the biggest Brazilian ranchers have 150,000 to 200,000 head of cattle.

They are bidding to come together in co-ops to acquire and reopen closed slaughterhouses, including some of the 16 JBS abattoirs in Mato Grosso, of which only 11 were open for business.

It’s obviously a different world in Brazil, but cattle farmers here cannot be blamed for their vigilance as mergers continue in the beef and sheep sectors.

It’s better all round to keep things competitive.

Even JBS might agree.

With its share price tumbling, and a huge €15.8bn debt burden, the company is retrenching, selling assets in Argentina, Paraguay, Uruguay, Canada, the US, and Northern Ireland (where it owns the Moy Park poultry enterprise).