Farm Ireland

Monday 19 March 2018

Seeing my poorer carcasses shows advantage of the QPS

Eustace Burke, Carrigaline, Co Cork, and judge Pat Sheedy parade the champion
Angus, Jessana Western Babe, at the Iverk Show, Piltown, Co Kilkenny
Eustace Burke, Carrigaline, Co Cork, and judge Pat Sheedy parade the champion Angus, Jessana Western Babe, at the Iverk Show, Piltown, Co Kilkenny

John Heney

'It's a pity that the fine day does any harm." I remember hearing these words as a child and wondering what exactly they meant. After this year's cold, dry spring and very dry early summer, I think I'm beginning to understand their true meaning at last.

This time last year I had sold four loads of cattle. To date, I have only disposed of one and a half loads. Worse still, they have not killed-out well. The percentage of carcasses grading P is up and the fat score has dropped substantially.

When I was picking them out for the factory, I felt that they looked fine and I was confident of a reasonable kill. However, the returns were, to say the least, disappointing. So much so, that I asked to see them hanging in the chill. When I got to see them they were hanging beside a group of R-grade cattle and I must honestly say I could not disagree with the grading.

There was a huge difference between my Friesians and the R-grade cattle. If I ever needed convincing of the benefits and indeed the necessity of the quality payment system (QPS) -- or grid as it is better known -- then this was it.

Farmers who produce higher-yielding carcasses are definitely entitled to be paid more for the extra meat.

I hadn't realised it but it has been well over 10 years since I last saw carcasses hanging in a cold store. The one thing that struck me about the R-grade cattle is that I firmly believe that they would have graded U a decade ago. Have the goalposts been moved or is it simply down to the increased use of Holstein in the dairy herd? It is very difficult to say. What I saw would lead me to believe that there has been a change in grading. My old kill sheets from that time showed very few P-grade Friesians, while R-grade Friesians were quite common.

This is certainly not the case now.

At the moment the price of store cattle appears to have increased by around €100/hd on last year. This is something I'm sure store producers are relieved about, but it does put a large question mark over the profitability of fattening cattle in the coming year. But was it ever any other way? I learned a long time ago that uncertainty and tight margins are the norm in beef production.

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The reality in beef production is that as costs increase, the actual price that we get for our cattle has fallen dramatically. For instance, my records show that a 318kg (700lb) Friesian carcass was making a flat rate of €3.30/kg (£1.18/lb) in late 1989. If the official inflation rate of 66.6pc (CSO figure) for the intervening 21 years is factored in, we should now be receiving €5.48/kg (£1.95/lb) for our cattle.

Of course, in 1989, EU price supports were included in the factory price that we received. So, in order to get a clear picture, we must add on the more recent single farm payments (SFP) that replaced these price supports to the price we are currently getting.

In my own case, I calculate my SFP to be worth around 92c/kg (33p/lb) on a 318kg (700lb) carcass. We must also include the SFP received by the store producer, which was based on the old €150 10-month special beef premium. This is worth another 47c/kg (17p/lb). When all these supports are added to the current factory price of €2.78/kg (99p/lb) for an average O-3 Friesian, it brings it up to €4.17/kg (£1.49/lb).

Alarmingly, this works out at about €420 less per head than the adjusted price in 1989 for the same 318kg carcass.

What this means is that after allowing for inflation and factoring in what is often condescendingly referred to by Government spokespersons as the "generous" SFP, farmers are actually receiving up to €420 or nearly 25pc less per animal than we did 21 years ago.

Is it any wonder that incomes remain so shamefully low in the sector?

One shudders to think of the situation after 2013.

Anyway, back to my current position. My cattle certainly need some more time on grass; some people may suggest that meal feeding would be a good idea and I could not disagree. However, it's still early days, and with the current plentiful supply of grass and the difficulties involved in sourcing non-GM feed, I will probably wait for another few weeks before I decide what course of action to take.

  • John Heney farms at Kilfeacle, Co Tipperary, where he finishes mostly Friesian cattle on a grass-based system.

Irish Independent