Farm Ireland

Wednesday 26 October 2016

German retail giant signs deal for Irish organic beef

Published 09/09/2015 | 02:30

John Purcell of Good Herdsman which has signed a deal with a German retailer. Photo Joleen Cronin
John Purcell of Good Herdsman which has signed a deal with a German retailer. Photo Joleen Cronin

A Tipperary-based company is set to launch one of the biggest contracts ever for Irish organic beef.

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Good Herdsman, the company owned by founder John Purcell and ABP, has just struck a deal to supply one of world's largest retailers, Germany's Real Metro group with up to 15t of forequarter beef per week.

While the deal is starting on a promotional basis only, Mr Purcell is hopeful that it will give Irish beef a bigger slice of the €7bn organic food market in Germany.

Mr Purcell is also in discussions with the high-end US retailer, Whole Foods, about supplying Irish organic burgers into that market for the first time.

"Manufacturing mince is making about 15pc more in the US and I think that the whole quarantine situation is going to improve, so I'm really hopeful about doing business there," he said.

Good Herdsman is the largest processor of Irish organic beef, killing 120 animals a week at the moment. Slaney Meats process close to 50 head.

Mr Purcell's comments come at a time when concerns are growing among farmers about the capacity of organic sector processors to handle the volumes of animals that will be coming off Irish farms by 2017.

The launch of a new organic scheme this year saw record numbers sign up to the scheme, bringing the total number of registered Irish organic farms to close to 2,000.

Improved premiums of up to €220/ha are payable to participants, with additional funding ringfenced for the organic sector through schemes such as TAMS.

However, many established producers are finding it increasingly difficult to secure an organic outlet for their stock, with some estimates suggesting that up to one third of finished stock from organic farms end up being sold into conventional channels. No processor is currently slaughtering cull cows for organic outlets, even if the animal meets all the organic requirements.

"This is obviously a concern for us, since leakages out of the organic sector weaken the rationale for funding the schemes," admitted the Department of Agriculture's Kevin McKeever.

"We're engaging both Bord Bia and all the processors in discussions about how to maximise new outlets for organic produce."

Some of the country's largest processors such as Dawn and Kepak have little or no organic processing lines. The lack of capacity appears to be most acute in the sheep sector, with just ICM Camolin killing lambs.

Many farmers report having to book in stock six months beforehand in order to get them killed. "I can't get anymore than two thirds of the lambs from my 120 ewe flock into organic channels. The rest are just killed conventionally," claimed Galway farmer, Enda Monaghan.

"I'm losing out on a premium of 15pc, and it means that the enterprise doesn't really make sense financially.

"The extra payments and priority access to GLAS are the only things keeping me in it," he said.

Mayo beef farmer, Eugene Kirrane said that he wasn't overly worried about whether there was an organic outlet for his stock.

"Because the organic system has allowed me to strip out all the costs like fertiliser and meal, I'm better off anyway.

"The only things that I can control are the costs inside my gate," he said.

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