“A small percentage of farmers are achieving €5+/kg when bonuses are added in, but when costs are spiralling out of control it’s just not enough and we need to see base prices rise significantly,” he said.
“Until recently €5/kg would have been viewed by farmers as the minimum price needed to make ends meet. Indeed, this is what Teagasc were saying as far back as last autumn. But that was then. With costs getting so out of control it is wishful thinking that €5/kg would cover our production costs now. Fertiliser prices have gone through the roof, and feed prices – which have already reached record highs – look set to rise even further”.
Mr. Graham said Teagasc now estimate that inflated feed and fertiliser costs are adding around 65c/kg to the cost of producing beef.
“But it’s not just feed and fertiliser prices that have gone up, inflation is hitting all our costs and it is wiping out any potential to break even at current prices,” Mr. Graham added.
“The war in Ukraine is likely to exacerbate input cost inflation significantly. The immediate impact will be to drive wheat prices sky high, and this will have a knock-on effect on all feeds. Ukraine is also a significant exporter of fertiliser, and all of this means that producing beef at €5/kg will not be viable”.