Tighter supplies to underpin returns
But the clamour for coupled payments is leading farmers down a blind alley
A complete turnaround in weather conditions and farmers' ability to get work done means 2013 is becoming known as one of the better years in farming in recent memory. Strong prices in dairy and beef have seldom been more welcome, being used as they are to pay down the debts incurred by the terrible weather and fodder problems of 2012 and spring 2013.
However, there is an air of gloom around the suckler herd that is out of kilter with the good mood elsewhere. There's a clamour for some sort of coupled payment quick fix, which, in truth, is leading people down a blind alleyway.
A small drop in suckler registrations in 2013 is cited as conclusive evidence that the sector is finished. Yet the facts also show that the suckler herd increased from some 980,000 calves registered in 2010 to 1,116,000 in 2012. When decoupling was first agreed in 2003, many predicted a total wipe-out for sucklers.
Meanwhile, the Teagasc Derrypatrick Herd has stumbled following the catastrophic weather and net margins have fallen by two-thirds. Some of the criticisms have been too harsh. Comparisons with Moorepark ignore the reality that dairying consistently returns at least three times more profit.
Most significantly, the meat industry has lobbied incessantly for a return of old-style coupled payments. Paul Finnerty of ABP recently called for "material support" for the suckler herd, which echoed his demand for coupled payments made at a Bord Bia event three years ago.
Minister for Agriculture, Simon Coveney, needs to be very careful to avoid being influenced too much by the meat industry. When we had coupled payments, they were happy to pay some of the worst beef prices in Europe, safe in the knowledge that there would be no reduction in numbers as farmers focused exclusively on filling quotas and maximising premia.
To be fair to the meat industry, Irish beef prices have been strong for a lot of 2013. However, better beef prices in recent years in Ireland have been inextricably linked with tighter supplies and higher live exports. In recent weeks, prices have weakened and that is linked to supplies creeping up again. In the first week of September, we had a kill of 30,874hd. Traditionally, when the kill goes over 30,000hd beef prices start slipping.