Better mood in beef forum but the conflicts remain

While all the parties at Thursday's beef forum restated their positions on the various issues that they promote, there is no doubt it was one of the quieter, indeed more constructive engagements in recent times. There was a general consensus among farmer and factory representatives to give the new Minister for Agriculture Michael Creed a fair chance, but the setting up of a working group to see how Food Wise 2025 might be delivered could be seen by cynics as another talking shop and the forum itself should be able to take care of delivering the beef element of Food Wise 2025. Average price breakdown on cuts isn’t particularly enlightening in itself but does provide an overview of the relative worth of different parts of the carcase.

Cloak of secrecy

There is no greater cause of the distrust that has built up over the years than the cloak of secrecy that hangs over the processing side of the industry’s profitability. Farmers sit back and watch the huge investments and regular appearance on rich lists and conclude that this is all coming from the heifers and bullocks they drop off at the local plant. In the absence of audited accounts such as are normal in the dairy industry, there is nothing to challenge this belief.

In this respect a sharing of limited commercial information on the range of prices being received for cuts is a welcome if small step forward. It falls a long way short of the US “cut out” model where not only is there a daily update on wholesale prices on the same basis as our weekly carcase price reporting system; there is an inventory of stocks published as well.

Reference point

Despite not being as good as they could be, the information on cuts can over time if continued build into a useful reference point for what is performing well and what isn’t. The fact that they are averages also masks the spread between different companies selling to different customers.

The constructive engagement is welcome and positive but very few positions stated ahead of the forum appear to have altered and issues on the table two years ago remain

For example, the spread of just 30c/kg on 90vl between QA (in spec) and non-QA (out of spec) looks suspiciously small when factory sources have told the Irish Farmers Journal that they often get in excess of €1/kg from their top paying premium customers over their lower paying commodity markets. However, if the data is captured regularly in the same way over a period of time, trends will emerge which are informative in themselves.

It is also interesting to observe the value of thin skirts pushing almost €5/kg, with thick skirts well over €6/kg and flank steaks making around €8/kg, which is way ahead of hind quarter roasting cuts. The US market, although small, has brought life into these cuts which helps offset the disappointing performance of the manufacturing beef sector.

The constructive engagement is welcome and positive but very few positions stated ahead of the forum appear to have altered and issues on the table two years ago remain. With Brexit looming and the inevitable threat to the UK market from likely UK trade deals, there is quite a challenge for the forum’s working group to deliver Food Wise 2025 in a way that provides a sustainable income for farmers.

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