Farm Ireland

Tuesday 24 April 2018

Fifth quarter comeback is good news for butchers, processors and for our livestock producers

John Shirley

Once upon a time, when school children were still allowed to be slapped and before women wore the trousers, a farmer could have a home freezer lamb or heifer slaughtered for free by a butcher or meat plant.

Today, if you want to slaughter your own animal for the freezer, you will be asked for about €15 a sheep and €80 to €90 for a heifer.

The difference between then and now is the contribution (or lack of contribution) that the fifth quarter can make to the overall income from an animal. Then, the hide skins and so-called offal covered the slaughter cost with a nice margin left over. Then, beef slaughter plants could even sell carcases at a few pence per lb less than the price paid to the farmer, and the fifth quarter still brought the animal in profit.

Then came BSE in cattle and, to a lesser extent, scrapie in sheep. Overnight meat and bone meal from ruminants became a huge cost rather than an asset. Hides and skins have also seen a lot of price volatility in the past decade.

Thankfully, the BSE threat has receded but much of the industry, that built up around BSE, lives on. And it lives on at a major cost to the cattle and sheep producer and to the whole economy.

When the disease first struck, regulators did well in that beef remained on the shelves in the face of the most almighty scare. Now, we are in calmer times, some of the BSE prompted measures are seen as not scientifically justified. There's also a feeling that some have a vested interest in not changing the BSE controls.

However, the EU Commission itself is looking at unwinding some of the controls. A recent EU paper called The TSE Roadmap II envisages that bovine meat and bone meal can be reintroduced into non-ruminant rations over the next few years.

From an Irish viewpoint, that change cannot come quickly enough. As a country we produced over 130,000t of meat and bone meal last year. Seventy seven thousand tonnes of this is called 'category 1' and is used for incineration in Germany or at a cement plant in Kilbeggan, where a gate fee of €10 to €30/t is charged. Sixty thousand tonns is deemed 'category 3' and can be used in pet food and as a fertiliser. Transforming this into product worth €250/t (at today's soya price) could deliver a significant payback on the fifth quarter of each animal.

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The fifth quarter is also getting a value boost from two other growth areas. One is the growing value of the pet food market. The other is the exotic demand for parts of the animal which we would never dream of consuming in Ireland.

This development was driven home to me recently when I saw a lot of foreign nationals outside an abattoir collecting items of offal that I would be afraid to feed to my cat.

The Irish cattle and sheep slaughter plants too, are becoming more aware of international demand for offal parts. On a recent visit to China, Bord Bia's Joe Burke saw novel demand for parts of the animal.

These included the more familiar items such as tongue, liver, tail, kidneys, heart, thinskirts, thickskirts, cheeks and headmeat, and tripe. There was also a market for delicacies such as lips, lung lobes, feet, aorta, tendons, Achilles heel, skirt/flank membrane, silverskins, pizzle, paddywack, testicles, trachea, esophogus, spleen, pancreas, sweetbreads and small intestine. As one wit remarked, there is a market for every part of the animal apart from the bawl.

On a 350kg cattle carcase it is estimated that all of these items could add up to 35kg or more. Even at an average of €2/kg this could reach €70 an animal. Regrettably, China has not yet lifted the BSE related ban on Irish offal but Agriculture Minister, Brendan Smith, is aware of the market's potential and continues to knock on their door. The same applies to the Japanese market for the 'mountain chain' from the beef carcase. At one stage this was making as much as fillet steak for export to Japan, but it too fell foul of the BSE scare.

The African continent is a growing market for Irish offal from bovines, sheep, and poultry. Cattle feet are highly prized. A visitor to South Africa told me of a shop selling chicken heads and feet, known as 'walkie talkies'.

On hides and skins the news is also positive. China has also become the dominant market for both. After suffering a collapse two years ago, good cattle hides are again making between €40 and €50 each, with China being the prime buyer. Back in the 1990's Turkish demand drove lamb skins to as high as €12 each but, overnight, this trade disappeared and price fell to €1 per skin. In recent times, well-presented lamb skins are making close to €6 a sheep or worth about 30c/kg on a 20kg carcase. Again, the demand is led from China.

According to the Irish buyers, money is being lost on hides and skins coming from smaller abattoirs and butchers because of inferior presentation.

Overall, it looks as if the fifth quarter is on its way back as a big earner for meat plants and hopefully this will be passed back to the producer.

Maybe I will again be able to have my freezer lambs slaughtered for free.

I'll keep dreaming.

Irish Independent