Darragh McCullough: 'Beef farmers have played their strongest hand but processors still hold all the aces'

Demands: The processors have conceded ground on age limits and bonus but have dug in on base prices
Demands: The processors have conceded ground on age limits and bonus but have dug in on base prices
Darragh McCullough

Darragh McCullough

Arriving at the site of the Ploughing Championships early last Wednesday morning I was struck by the big 191- and 181-reg 4x4s queuing in the exhibitors' gate.

As a colleague reminded me, there's never been much money in farming but there's plenty of money from farmers.

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All the way into the event, morning news coverage played out the latest pronouncements on the crisis gripping the beef sector.

It was a bit rich listening to restaurant owners who've hit the good times again with their €30 steaks to be lecturing farmers on putting the 'national interest' ahead of their demands for higher prices. Easy for them to say when their livelihoods weren't at stake.

The harsh glare of media attention has, in a perverse way, forced many farmers to face up to hard questions.

Why are they continuing to invest and work all the hours that God sends if there's no money in it? Who would encourage a son or daughter to commit their best years to a loss-making enterprise? If a massive lift in beef prices is a pipe dream, then what is stopping us looking at more viable alternatives?

It has also deepened the fragmentation of beef farmers. Back in the good old days, one farm organisation could credibly claim to represent every producer.

Even though we've at least six different groups now claiming to be the authoritative voice for the sector, it turns out that none of them represent everybody, especially those hard-liners who remained on the pickets even after the deal was done last week.

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There was very little support for these last protestors among beef farmers at the Ploughing.

Many full-time beef farmers believe that the hard-liners were not dependent on selling to beef factories for a living so it was no bother for them to dig in for a better offer.

That will leave a residue of resentment among full-time beef finishers, who I suspect will be very slow to row in with any break-away groups demanding direct action ever again.

They may even distance themselves from part-timers who don't depend on beef sales to put bread on the table.

So while there was a part of every farmer that wanted to see the protestors stick it to the beef processors, the action may well have caused long-term damage to the unity within the sector.

The Beef Plan Movement have succeeded spectacularly in showing up the lack of action from the incumbent farm organisations in tackling farcical rules and specifications.

Especially satisfying is the about-turn that the processors were forced into on getting Southern cattle processed in UK plants without any impact on their origin status. A classic example of when push came to shove, the bluster about nomad cattle was proven to be exactly that - bluster.

In the process the initiative started by the Beef Plan has yielded farmers up to €30 a head in extra bonuses. That's worth the guts of €24m a year, which is a serious result by any measure.

But the exercise has also shown up the limitations of any group to force the hand of the beef industry. When Beef Plan leaders were forced to disown the protests it did nothing for the confidence of their members.

It was also a pity that none of the main farm organisations had formed a producer organisation that would have allowed them to negotiate on prices without any fear of Competition and Consumer Protection Commission.

Producer organisations are not to be confused with producer groups, of which there are plenty around the country buying inputs and doing deals with processors to collectively sell members' stock.

Producer organisations, however, have special legal status that would allow them to negotiate prices without fear of any interference from the likes of the competition authorities.

The IFA claims that the rules governing the establishment of these groups are unworkable, and petitioned the Department of Agriculture for changes last year.

But even if they had been able to negotiate on price, farmers were unlikely to have received much extra out of the beef barons. Those guys were never going to start paying way above the European average.

That leaves many beef producers looking to the year ahead with heavy hearts. They know they've played their strongest hand, and they went all in.

The big prize turned out to be a 10c/kg increase in the price for your bullock, but that's a small consolation when you need an extra 60c/kg to just break even.

Indo Farming


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