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The fat lady is singing for the Irish suckler herd

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The relationship between farmers and processors has hit an all-time low

The relationship between farmers and processors has hit an all-time low

The relationship between farmers and processors has hit an all-time low

The thin threads holding together the Irish beef industry have, after a long unsettled period, finally come apart in the past few weeks. The relationship between farmers and processors has hit an all-time low. By the time this column appears, the latest battle may or may not have fully subsided but it makes me fear for where all this is going.

The Competition and Consumer Protection Commission (formerly the Competition Authority) made it very clear that price could not be part of any discussions so instead last week's talks between the two sides focussed on the more peripheral issues of spec, weight and age limit.

These are structural issues which impact on price every week but that does not change the fact that base price levels are too low to cover the cost of production of most farmers.

While any relaxation of various quality specifications may ease access to the factory in the short-term, could this actually be used as a stick to beat us at some future point? It could be seen as a tacit admission that we are unable to produce animals to premium market requirements.

It is almost exactly 15 years since there was a comparable farmer shutdown of factories and the key issue remains the same, price.

A lot has happened in the meantime.

Beef consumption in the EU is no better than stable, as white meats continue to grow in popularity.

Our main beef processors have expanded their operations in Britain and, with that market reportedly becoming ever more nationalised, this trend looks set to intensify further. So it seems they increasingly see Irish beef as going into the lower end of the market.

Given the impending end of the milk quota regime supplies of finished cattle from the dairy herd are set to increase. As I was told by a factory source during the summer, they expect that they would be able to fill their supermarket contracts from the dairy herd.

Shortages

Add to this the increase in the numbers of cattle which the factories are themselves putting into feed lots, to bring into the system whenever required. At present, seasonal shortages are one of the things that farmers can rely on to give prices a boost.

Put all these together and it would be hard not to conclude that beef farmers will become weaker over time in their negotiations with meat factories.

It seems to me that there is a lack of leadership and clarity of direction for farmers. Food Harvest 2020 is a plan for the industry not for farmers. Are we at anything producing quality beef if it is only destined for processing? And more of it just means more for processing.

But we shouldn't throw in the towel before exhausting all options.

Has the time come to recognise that there is no one product that is Irish beef and that instead of telling ourselves that its all prime product just waiting to be properly appreciated, we would accept it is many different things and market it accordingly, with farmers getting more directly involved in the process.

Given the dominance of the existing processors, it is hard to see the establishment of too many significant new routes to market but perhaps there is some hope for alternative product lines.

Agricultural policy specialist Stuart Meikle has done a lot of work on this area and among the lines he suggests are heritage breeds, locality specific and grass-reared suckler. By the way, these would be very compatible with our traditional small-scale production systems.

Intrinsic to the success of any such approach would be the building up of more integrated supply chains which have become commonplace in food business, especially the prime end.

It is something that farmers have traditionally shied away from, fearing that the establishment of any kind of long-term commitment would be used by the factories to keep prices down, that the only way to keep them 'honest' is to keep 'em guessing as it were.

Though, given recent events, it's hard to see too many long-term contracts being pushed on farmers any time soon.

As for the producer groups in which Minister Coveney seems to have a lot of faith, they might improve the farmers hand when it comes to negotiation but it's hard to see them being a good fit with the notion of long-term relationships.

Moreover, how do these fit in with the CCPA instruction to the IFA last week that it cannot enter into a collective agreement on behalf of its members regarding the prices at which those members are willing to supply to meat processors?

But there are other elements to the picture. A number of other bodies and businesses are directly linked to the sector but beef farmers seem to have been left to face this battle on their own. There is still plenty that the minister can do. And what of Bord Bia and Teagasc?

The factory protests have been driven by the grassroots and the farmers protesting in Rathdowney last week seemed to be expressing a range of feelings.

These include a sort of relief that they were finally getting to vent some of the anger and frustration that they have built up against factories over almost a year.

There was also discomfort. Standing around at factory gates, outside of their comfort zone, stamping their feet and rubbing their hands to keep warm while work was mounting up at home, especially as the rains set in and cows were bawling to come in.

But there was also a real sense of fear for the future. Beef farm incomes have been declining sharply. Some will never recover financially from the losses they have incurred over the past year. At a personal level, it is sad to see such a hard-working group of people being reduced to this sorry state.

As things stand, I fear the fat lady is singing for the Irish suckler beef herd.

Email: afitzgerald@independent.ie

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