Farm Ireland

Sunday 25 February 2018

Ireland can learn a lot from the Spanish who have recovered so well following 2007 collapse

Bord Bia's Cecilia Ruiz (right) takes a look at Jesus Riuz's (left) 6'000hd feedlot at Menasalbas near Toledo, Spain
Bord Bia's Cecilia Ruiz (right) takes a look at Jesus Riuz's (left) 6'000hd feedlot at Menasalbas near Toledo, Spain

John Shirley

"Jesus, I came expecting that you might buy Irish weanlings but instead I find that we could nearly buy weanlings off you," I said. I was visiting the 6,000hd Duigan feedlot of Jesus Ruiz at Menasalbas near Toledo in Spain and was taken aback at the price he quoted for his purchased weanlings.

In contrast, I was impressed by the price he is getting for bulls being live shipped to the Lebanon. I wonder why Irish cattle are not going to this traditional outlet.

Spanish feedlots, devastated by the grain price spike in 2007, have recovered well. And this is reflected in higher live calf and weanling imports this year from Ireland.

Again, they now face another hike in cereal prices. But this time the surge in world beef prices may avert a repeat of the 2007/08 collapse.

Mr Ruiz said that the Duigan feedlot lost €1m from the 2007 grain price hike, but this has been recovered in the interim and he is still in business, unlike 30pc of his colleagues.

When I called to his unit earlier this month, his critical figures were:

  • 220kg bull and heifer weanlings (Spanish born) delivered at just under €500/hd;
  • Selling beef price 320c/kg (excluding VAT which equates to an Irish VAT inclusive price of 336.64c/kg);
  • Alternatively selling for live export at €1.9/kg live excluding VAT;
  • Live sale weights are about 600kg for bulls and 500kg for heifers;
  • Barley at €166/t:
  • Maize grain at €200/t.

The weanlings arriving on the Duigan feedlot at the €500/hd were mostly Limousin and Charolais. Quality was good.

Mr Ruiz said that 30pc graded E at slaughter but this could partly be explained by the Spanish factory grading being easier than Ireland's.

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Spanish suckler farmers have switched to French-type breeding and their suckler cow premium remains coupled, but surely they cannot be happy selling weanlings for €500/hd. Small wonder that their suckler cow herd has fallen by about 5pc over the past five years to the current level of just over 2m cows.

To get the bulls to 600kg and the heifers to 500kg they are fed on the standard Spanish feedlot diet of ad lib meals. Heifers get about 1t/hd and the bulls just over 1.5t/hd of a higher energy feed.

At an average kill out of 58.5pc the finished bulls are realising €1,123 (excluding VAT) for the carcass trade. Small wonder then that Mr Ruiz is energised by the newish live trade which is taking the lower quality bulls at €1.9/kg liveweight or €1,140/hd.

These bulls are being shipped to the Lebanon with no subsidy or export refund. This market was once supplied from Ireland and would be again today if the Department of Agriculture would approve any one of the boats that I understand have been proffered for inspection.

Such has been the surge in the world beef price that countries like Egypt, Libya, etc, are now paying over $3,000/t liveweight delivered (€2.25/kg) for very plain cattle. This is way, way higher than today's price in an Irish beef factory.

After the 2007 turmoil in grain prices, Spanish calf and weanling imports crashed from 618,000hd in 2007 to 337,000 in 2008. The recovery in the feedlot sector has also led to recovery in imports. Up to the end of July 2010 Spanish live imports from Ireland jumped from 29,900 to 45,900 compared to the same period in 2009. The bulk of this was in calves which rose from 21,000 to 33,000hd.

A clampdown on illegal growth promoters in Spain (which included heavy fines and jail sentences) has led to higher interest in bull weanlings from Ireland. The use of the feed additive Romensin has also been banned, a decision described by the feedlot owners as disastrous.

A feedlot that continues to take Irish heifers is to be found within the Madrid boundary. Antonio Fernandez, owner of Madrid's biggest disco and nightclub, also keeps a rolling average of 1,000 heifers in his feedlot which lies adjacent to the night revellers.

When I visited I reckoned that the bulk of the feedlot heifers were Irish born. He buys continental type heifers of 250 to 270kg liveweight which, this month, were costing about €600/hd delivered. He liked the growth and health of the Irish heifers which quickly adapted to the ad lib meal regime.

After four or five months on this he expected the heifers to hit 270kg carcass weight. The current price is about 338c/kg deadweight but I suspected that the non farming ventures were the primary money spinner for this man.

Cecilia Ruiz, manager of the Bord Bia office in Madrid, said that the dip in the Spanish economy was having a serious impact on the consumption of beef and lamb meat.

She reckons that annual beef consumption has fallen from 13kg to less than 10kg per person and lamb is now under 3kg. This is partly offset by a fall in the Spanish domestic herd where dairy cow numbers are back 18pc in five years.

Irish beef factories continue to work with supermarkets at the top end of the quality spectrum. Products such as Hereford Prime are making small inroads as Irish exporters work at getting the same beef shelf life as their competitors from South America.

On my visit I tested an Argentine fillet steak. It was as tender as butter. The competition is fierce but we must continue to try harder to place the cattle and beef from our 'Food Island' at Number One.

Irish Independent