Farmers often feel helpless when negotiating with large, well-organised processors. However, their collective power was evident this week when they locked down 30 meat factories across the country. Ironically, what was most evident from the protest was just how interdependent farmers and processors are. However, the relationship has been one-way for too long.
As we report in this week's paper, farmers are showing a willingness to fight back with a real appetite for further and prolonged action. The extent to which this appetite develops will depend on how factories address the €350 British-Irish price differential over the coming weeks.
Factories have been quick to dismiss the actions of farmers largely on the basis that the British price is not an accurate reflection of the value of finished cattle in Ireland. However, the claim carries little weight given that the industry response to a record price differential has been an increase in exports of Irish beef to Britain by 20%.
In defending processors and in an attempt to further discredit the price comparison, Meat Industry Ireland (MII) highlight that just 15% of Irish beef exports are sold through British retailers. For the purposes of clarity, we note the fact that the €350 price differential is based on the average price paid for R-grading steers in Britain and not animals selected specifically for the British retail market, which in many cases attract additional premiums.
Ultimately the MII statement raises more questions than answers. Firstly, it questions just how successful we have been in promoting the quality of Irish beef. While Minister Coveney’s flagship Origin Green fits the bill in relation to a slick marketing campaign, is it retuning a dividend for farmers?
The fact that just 15% of our beef is sold on the retail shelf also calls into question the legitimacy of the British retail specs imposed by Irish processors last spring and the severe price penalties that went along with them. It is worth noting how quickly factories loosened the specs when Irish prices fell back below the EU average and as the British-Irish differential widened.
The low volume of Irish beef on the retail shelf also exposes the fact that the labelling regulations being used to prevent the live trade between Britain and Ireland developing are a mere smokescreen. This trade, which would bring real competition into the market, has been blocked by processors with operations on either side of the Irish Sea claiming that there is no retail label to cover beef from Irish-born and British-finished cattle.
Based on the MII figures, just 85,000 of the 260,000 tonnes of fresh Irish beef exported to Britain each year ends up on the retail shelf. The majority is channelled through other markets, such as the food service sector, which doesn’t have the same labelling constraints. Why can’t this market be serviced with beef from Irish-born and British-finished cattle?
As we went to press, Minister for Agriculture Simon Coveney was convening the third beef roundtable meeting. To date, the meetings have delivered little. With farmer attention firmly focused on price, questions should be asked as to the suitability of a beef forum to address the immediate issues. Direct dialogue between farmers and processors would perhaps stand a better chance of yielding dividends. It may also be worthwhile involving some British retailers. A well-disciplined Irish producer group should be attractive to UK retail players.
So what role has Minister Coveney? One of the most important markets he can deliver for the beef industry is a live trade to Britain. This would provide a much bigger boost to farmers than the opening of any third-country market.
We need the Minister to escalate the issue either at EU level, through the council of agriculture ministers or directly with his British counterpart. At farm level, we have to work to position Ireland as a strategic food partner for Britain and not a competitor.
While Irish beef imports are not a threat to British beef farmers, cheap Irish imports are.